….prices of foods, commodities, and services may come down
In an unprecedented move, Dangote Petroleum Refinery has announced a further reduction of the price of diesel from 1200 to 1,000 naira per litre.
While rolling out the products, the refinery supplied at a substantially reduced price of N1,200 per litre three weeks ago, representing over 30 percent reduction from the previous market price of about N1,600 per litre.
This significant reduction in the price of diesel, at Dangote Petroleum Refinery, is expected to positively affect all the spheres of the economy and ultimately reduce the high inflation rate in the country.
The implication of this is that prices of goods and services may begin to go on a downward trend very soon. This is because this crash in the diesel price is also expected to be reflected in the prices of food items, goods and services in the country.
The current high cost of food has been blamed on the price of diesel which has been very high recently.
Transportation and cost of production are major factors affecting the prices of food. Transport is quite high because of the high price of diesel and the cost of production also is another factor because fertilizers are higher and other farm inputs are also costly.”
Nigeria’s increasing cost of food commodities has become a serious cause for concern in recent years. The situation became more complex after President Bola Tinubu announced the end of fuel subsidy payments during his inauguration as president on 29 May 2023.
The ripple effects of this policy became more evident in the skyrocketing prices of goods and services as well as the transportation costs across the country, with ripple effect on food inflation.
According to the report of the National Bureau of Statistics (NBS), the food inflation rate in March 2024 quickened to 40.01 percent on a year-on-year basis, 15.56 per cent points higher than the rate recorded in March 2023 (24.45 per cent). In recent years, food prices have been on the rise across Nigeria
On a Month-on-Month basis, however, March 2024 Food inflation was highest in Abia (5.17 percent), Cross River (5.14 percent), Bayelsa (4.75 percent), while Borno (1.59 percent), Yobe (2.08 percent) and Adamawa (2.12 percent)
Also, the core inflation (All items less farm produce and energy) which excludes the prices of volatile agricultural produce and energy stood at 25.90 percent in March 2024.
The highest increases were recorded in prices of bus journeys within the city, actual and imputed rentals for housing, consultation fees of medical doctors, pharmaceutical products, etc.
Nigerian manufacturers have also blamed the high cost of diesel as the reasons why the prices of goods are high in Nigeria. The Director General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, stated this while reacting to the surge in the cost of goods in Nigeria
By Damilola Bello
