Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 37)

According to the National Bureau of Statistics (NBS), the prices of energy products increased further in August. The average retail price of a litre of petrol increased by 14.89 percent to N189.46 in August 2022 from N164.91 in August 2021.1 The price of a 5kg Cylinder of Cooking gas rose by 101.17 percent to N4,397.68 in August 2022 from N 2,215.33 in August 20212. For household kerosene, the price of a litre of the product rose by 102.38 percent from N400.01 in August 2021 to N809.523. The price of a litre of diesel rose by 209.54 percent to N786.88 from N254.21 in August 20214. These increases are partly due to (i) the spike in crude oil price affecting the prices of its refined products, and (ii) exchange rate depreciation. The rate of increase was higher because the refined crude oil products were imported. High energy prices contribute partly to the country’s rising headline inflation by increasing the input costs and overall cost of production. Hence, there is a need for the government to initiate policies that can limit the rate of price increases. Fixing existing refineries and introducing incentives to attract investors to invest in modular refineries will likely boost domestic production of refined crude oil products and eliminate increases in energy prices associated with the importation of the products.

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