• World
  • Columnist
  • Commodities
  • WORLD BUSINESS & ECONOMY
  • Executive Knowledge Series
  • Finance
  • Manufacturing
  • Markets
  • Risk & Governance
  • Small Business
  • Technology, Media & Innovation
  • Comments
  • Business AM WebTV
  • Login

Businessamlive
  • FRONTPAGE
  • FINANCE
    • AllAsset ManagementAuditBankingBondBudgetCapital MarketsC&I LeasingCurrencyDealDebt marketForexFund RaisingFundingGovernmentHedge FundsInsuranceInvestmentInvestorInvestor ServicesMergers & AcquistionsMoney marketMortgagePensionsPersonal financePonziQuantitative EasingshareTaxationTSAWealth Management
      Banking

      Q3’19: Banks’ NPLs moderate by N1.14trn

      10 hrs

      Finance

      Decline in FDI to persist in Nigeria, say experts

      11 hrs

      Banking

      Acess Bank donates to immigration service in Lagos

      12 hrs

      National Assembly raises own 2020 budget by N3bn

      14 hrs

  • MARKETS
  • ECONOMY
    • AllAfricaAgricAirportsAmericaAsiaAustraliaBreakthroughDealEuropeForeign InvestmentsforexGlobal marketGovernanceIMFMiddle EastNECANigeriaOutlookRich listSouth AfricaSport BusinessTradeU.KWest AfricaWorld Economic forum
      South Africa

      On South Africa GDP contraction 

      December 4, 2019

      Foreign Investments

      Countries seen rejecting foreign investments for national security, says UNCTAD report

      December 3, 2019

      Frontpage

      US in another trade war, vows to impose 100% fine on French goods 

      December 3, 2019

      Frontpage

      Nigeria will have 25% of world’s poor without reforms – World Bank

      December 2, 2019

  • COMMODITIES
  • ENERGY
    • AllConferenceElectricityOil and GasPowerRenewable
      Energy

      OPEC, allies cut oil output by 1.7mbpd

      9 hrs

      Frontpage

      US becomes net crude oil exporter, first time ever

      10 hrs

      Energy

      OPEC tackles energy poverty in Africa as oil nations convene in Vienna

      12 hrs

      FG to take over Yola Disco with N27bn

      15 hrs

  • TECHNOLOGY
  • MANUFACTURING
  • ANALYSIS
    • Analysis

      Nigeria’s resilience against global risks

      December 3, 2019

      Analysis

      Getting the Board on board GRC implementation

      December 3, 2019

      Analysis

      How much money do you need?

      December 3, 2019

      Analysis

      On statement of changes in equity

      December 3, 2019

Frontpage

Inflation to ease, firms operating cost to drop on declining diesel price

Obodo Ejiro

Reporter

June 19, 2017879 views0 comments

The Nigerian National Petroleum Corporation (NNPC) claims of a reduction in diesel price  by 42 per cent could positively ease the nation’s level of inflation, reduce firms operating costs and boost growth in Africa’s biggest economy, analysts have said.

The crash in diesel price is seen to ease the cost of production for many manufacturing companies and the telecommunications industry, which rely on diesel for electricity.

A report by McKinsey and Company in 2015 indicated that major Africa mobile phone operators spend about 60 percent of their operating cost to power their towers and other telecommunication equipment while using diesel.

“Most causes of inflation in Nigeria are not as a result of effective demand or excess demand, but due mainly to rising cost of production. So, a lowering of the cost of production could translate to lower inflation figures,” an analyst told Businessamlive.

Diesel apart from fuelling production plants in the absence of grid power is also the backbone of logistics and transportation, which have raised prices of goods.

Analyst equally say manufacturing concerns as well as service companies expend more than 35 percent of operating cost on generating electricity with the cost eventually passed on to the consumer in form of higher prices.

Ndu Ughamadu, the group general manager, Public Affairs Division of the NNPC, Sunday said the corporation had crashed the price of diesel by 42 percent.

He said diesel, also known as Automotive Gas Oil (AGO), had had a huge downslide over the last six months, following key strategic interventions by the NNPC.Image result for nigerian national petroleum corporation downstream sector

“In the first quarter of 2017, retail prices of AGO, which is one of the deregulated products, shot to an all-time high of N300 per litre in major demand centres across the country,” he said, adding that such unpleasant situation placed a huge burden on truck drivers, who need the product for transport; and the nation’s manufacturing sector, which requires it to run its operations, as well as the masses, who need it for household power generation.

“However, following strategic intervention efforts by the NNPC toward sustained improvement in the supply of diesel, the product’s retail prices as at the end of May ranged from N175 to N200 across the country (a significant price drop of about 42%).
“Ex-depot prices also dropped to between N135 and N155,” Ughamadu said.

He explained that the corporation’s strategic interventions include improving the supply of AGO and remodeling of the product distribution to address sufficiency issues across the country.

“Since January this year, we have worked very hard with relevant stakeholders to improve distribution from refinery depots, by implementing a robust loading programme. The Corporation was able to resuscitate its critical pipelines and depots in places such as Atlas Cove-Mosimi, Port-Harcourt Refinery-Aba and Kaduna Refinery – Kano,” he stated.

About Post Author

Obodo Ejiro

Reporter

See author's posts

Related posts:

US becomes net crude oil exporter, first time ever
How Nigeria can meet 4% annual trade growth, by Iheanacho
OPEC tackles energy poverty in Africa as oil nations convene in Vienna
Investors scared of Nigeria, says Utomi
Moody’s changes Nigeria’s ratings from stable to negative
265 MDAs breached financial reporting requirements in 2017 – Auditor General
Why CBN, NNPC are not on our platform, says IPPIS
Senate amends Procurement Act, increases mobilisation fee to 30 per cent
Reps raise 2020 budget to N10.6tn
Saudi Aramco targets top end valuation of $1.7trn
Share on Facebook Tweet Email
TagsAfrica Inflation McKinsey Nigeria nnpc
PreviousHow business can take the lead on combating climate change
NextTo manage millennials, lead them well

Leave a comment

- Cancel reply

MARKET DATA

Recent Posts

  • OPEC, allies cut oil output by 1.7mbpd
  • MTN, Glo, Airtel, 9Mobile, ntel spam subscribers 85% of the time, says Truecaller report
  • Ihedioha signs Imo State Hotel, Restaurant Occupancy tax law
  • Q3’19: Banks’ NPLs moderate by N1.14trn
  • US becomes net crude oil exporter, first time ever

World

Europe

EU businesses to cut investments in 2020, says EIB report

America

U.S. increases cost of visa application for Nigerians

Africa

Thatcher-Loving Nigeria Candidate Plans to Overhaul Economy

Africa

Ethiopia considers sale of minority stakes in telecoms, airline to foreign investors

Africa

AfDB scales up industrialization pace on the continent, delivers improved business access to finance, skills, energy

Frontpage posts

0

Bitcoin is a ‘fraud’ that will eventually blow up, says JPMorgan CEO,

Frontpage September 13, 2017

1
2

Governor Ambode of Lagos canvasses 25-year export policy roadmap for Nigeria

Frontpage July 5, 2018

3

Fuel usage by Nigerians rises as NNPC distributes 33% more products in  July

Frontpage November 5, 2018

4

Oil prices stabilise as traders assess U.S. hurricane impact

Frontpage September 12, 2017

5

Nigeria loses $9bn to foreign ship owners annually, says NSC

Frontpage June 28, 2019

SUPPORT

  • Photo Gallery
  • Help Centre
  • About Us
  • Accessibility

LEGAL & PRIVACY

  • Terms & Conditions
  • Privacy
  • Cookies
  • Copyright

SERVICES

  • Conferences & Events
  • Analysts Research
  • Advertising Rate
  • Ebooks

TOOLS

  • Portfolio
  • Newsletters
  • News feed
  • Currency Converter

SUBSCRIBE

Join us to get latest updates on business related news.

[mc4wp_form id="3076"]
  • ABOUT US
  • CONTACT US
  • CAREERS
  • TERMS & CONDITIONS
  • PRIVACY POLICY
Copyright 2017. All rights reserved. BusinessAMLive. A Businessnewscorp Member Company.