Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 7)

The NBS report shows that the average retail price paid by consumers for premium motor spirit (petrol) slightly increased to N166.40 per litre in January 2022 from N 164.09 per litre in December 2021, indicating a 1.41 per cent increase year-on-year2. Assessment of month-on-month data shows that the average retail price increased by 0.38 per cent from N165.76 per litre in December 2021. Abia state had the highest average retail price of petrol with N177.33 per litre, followed by Kebbi with N176.11 per litre, and Cross River with N172.38 per litre. Borno state had the lowest average price of N155.81 per litre, followed by Adamawa, with N159.88 per litre, and Lagos, with N163.26 per litre. Crude oil prices have risen by about 57 percent in the last year, from $54.8 per barrel in January 2021 to $86.5 per barrel in January 2022. However, the retail price of petrol increased slightly over the same period due to government subsidies. The decision of the government to retain the petrol subsidy for the next 18 months suggests that the price will remain relatively stable over the next few months. Consequently, upward trends in the price of crude oil would suggest that government petrol subsidies would be higher than planned and, in turn, lower the amount available for other sectors of the economy. Hence, there is a need for the government to develop a framework that would address the inefficiency in the oil industry, especially fixing the existing refineries that led to the persistence of the petrol subsidies.

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