Business

Inflation Hits 18yr High at 22.4%, To Surpass 23% This Month

Published

2 years ago

June 16, 2023

Investment analysts have predicted that headline inflation rate will rise above 23 percent on account of recent government policies including removal of fuel subsidy and naira depreciation in the forex market.

Meanwhile, the National Bureau of Statistics, NBS, Consumer Price Index, CPI, report for May, 2023, shows headline inflation rose year-on-year by 0.19 percentage point to 22.41 percent in May from 22.22 percent in April.

This is the highest inflation rate recorded in Nigeria since September 2005 and the third straight month of staying within the 22 percent band.

Recall that the Federal Government recently removed fuel subsidy resulting in over a hundred percent rise in the pump price per litre while the Central Bank of Nigeria, CBN, two days ago, floated the foreign exchange rate, resulting in 40% depreciation of the local currency, the Naira, to N664.04/$ in the official market.

The NBS report stated: “In May 2023, the headline inflation rate increased to 22.41 percent relative to April 2023 headline inflation rate which was 22.22 percent.

“Looking at the movement, the May 2023 inflation rate showed an increase of 0.19 percent points when compared to April 2023 headline inflation rate.”

The Bureau also said that food inflation rose to 24.82 percent in May from 24.61 percent in April due to increases in prices of oil and fat, yam and other tubers, bread and cereals, fish, potatoes, fruits, meat, vegetable, and spirit.

Commenting on the development, Cowry Asset Management Plc, in its inflation update report for May, said: “Over time, the Nigerian government, through the monetary authority, has taken several measures to tame inflation, including raising interest rates, devaluing the naira, and subsidising the prices of some essential goods.

“However, these measures have proved abortive and unsuccessful in bringing inflation under control.

“Notwithstanding these efforts, the new administration has hinted at the need for interest rate moderation in a bid to increase investment and consumer purchasing power.

“We note that this move will bring about a further spike in the rate of inflation.

“Also, CBN’srecentdecisionto float the naira will bring about further depreciation of the naira, while we expect to see the effect of the current subsidy removal by the new administration on price pressure and economic activities.

“The resultant effect of this decision will be more expensive imports and upward inflation pressure.

“Meanwhile, we expect a further surge in the headline inflation index to 23.6 percent in June.”

In their Economic Bulletin for June, analysts at Financial Derivative Company, FDC, said:

“The full impact of the petrol price adjustment will be felt in the inflation numbers for June, which initial estimate is put at 25.2 percent.

“However, the price of diesel, which is the major fuel used by trucks for logistics, declined by 12.70 percent to N660/ltr in June from its peak of N756/ltr in May. This is expected to mildly ease inflation pressures. Another interest rate hike may be imminent.”
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Business

JUST IN: Dangote Refinery Hikes Petrol Ex-depot Price

Published

2 weeks ago

June 20, 2025

Editor

Nigerians may soon pay more for petrol as the Dangote Petroleum Refinery on Friday increased its ex-depot price for Premium Motor Spirit to N880 per litre, raising fresh concerns over fuel affordability and price volatility in the downstream sector.

Checks on petroleumprice.ng, a platform tracking daily product prices, and a Pro Forma Invoice seen by The PUNCH confirmed the hike, representing a N55 increase from the previous rate of N825 per litre.

The increment would ripple across the entire fuel distribution chain, likely pushing pump prices above N900/litre in some parts of the country, especially in areas far from the distribution hubs.

The hike comes despite global crude prices falling. Brent crude dipped by 3.02% to $76.47, WTI fell to $74.93, and Murban dropped to $76.97 on Friday. The decline in benchmarks offers little relief due to persistent fears of sudden supply disruptions.

The refinery has increased its reliance on imported U.S. crude and operational costs amid exchange rate instability, which adds to its pricing pressure.

On Thursday, the President of the Dangote Group, Aliko Dangote, said his 650,000-barrel capacity refinery is “increasingly” relying on the United States for crude oil.

This came as findings showed that the Dangote Petroleum Refinery is projected to import a total of 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered in the past two months, amid ongoing allocations under the Federal Government’s naira-for-crude policy.

Dangote informed the Technical Committee of the One-Stop Shop for the sale of crude and refined products in naira initiative that the refinery was still battling crude shortages, which had led it to resort to imports from the United States.

On Monday, the president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Festus Osifo, accused oil marketers of exploiting Nigerians through inflated petrol prices, insisting that the current pump price of PMS should range between N700 and N750 per litre.

He criticised the disparity between falling global crude oil prices and the stagnant retail price of petrol in Nigeria.

“If you go online and check the PLAT cost per cubic metre of PMS, convert that to litres and then to our Naira, you will see that with crude at around $60 per barrel, petrol should be retailing between N700 and N750 per litre.”

He asserted that if Nigerians bear the brunt of higher fuel costs, they should be allowed to enjoy the benefit of low pricing.

His forecast of increased costs now appears spot on, considering the latest developments.

Marketers are already adjusting. Depot owners and fuel distributors in Lagos and other cities anticipate a domino effect, with new price bands expected to follow Dangote’s lead.

Many had held back pricing decisions since Tuesday, when the refinery halted sales and withheld fresh PFIs. The delay fueled speculation, allowing opportunistic price hikes across various depots.

Business

Naira Appreciates At Official Market

Published

1 month ago

May 24, 2025

Editor

The Naira, which has seen steady appreciation against the Dollar all week, closed stronger on Friday, trading at ₦1,580.44 in the official forex market.

Data from the Central Bank of Nigeria’s website show the Naira gained ₦4.51k against the Dollar on Friday alone.

This marks a 0.28 per cent appreciation from Thursday’s closing rate of ₦1,584.95 in the official foreign exchange window.

The local currency maintained consistent strength throughout the week, recording gains daily.

On Monday, May 19, it traded at ₦1,598.68; on Tuesday, at ₦1,590.45; and on Wednesday, at ₦1,584.49.

These gains suggest increased investor confidence and improved forex supply, contributing to the naira’s performance.

Meanwhile, the CBN, at its 300th Monetary Policy Committee meeting held Monday and Tuesday, retained the Monetary Policy Rate at 27.5 per cent.

Business

BREAKING: Again, Dangote Refinery Cuts Petrol Price

Published

1 month ago

May 22, 2025

Editor

The Dangote Petroleum Refinery has announced a nationwide reduction in the pump price of Premium Motor Spirit (PMS), commonly known as petrol, with new prices now ranging between ₦875 and ₦905 per litre, depending on location.

The ₦15 per litre cut applies across all regions and partner fuel stations, and was confirmed via an official announcement posted on Dangote Refinery’s social media channels on Thursday.

Major marketers participating in the new pricing regime include MRS, Ardova, Heyden, Optima Energy, Techno Oil, and Hyde Energy — partners in the distribution of Dangote-refined products.

Under the previous pricing structure, Lagos residents paid ₦890 per litre, while prices reached ₦920 in the North-East and South-South regions. With the latest adjustment, Lagos now pays ₦875 per litre, while the North-East and South-South will see prices drop to ₦905.

A regional breakdown of the revised prices is as follows: Lagos: ₦875, South-West: ₦885, North-West & Central: ₦895, North-East & South-South: ₦905 and South-East: ₦905.

In its announcement, Dangote Refinery encouraged consumers to purchase fuel only from authorised partner stations and urged the public to report any cases of non-compliance via its official hotlines: +234 707 470 2099 and +234 707 470 2100.

“Our quality petrol and diesel are refined for better engine performance and are environmentally friendly,” the company said.