• Thursday, April 18, 2024
businessday logo

BusinessDay

Likely pause in US Fed rate hike & Nigerians paying more for petrol

Likely pause in US Fed rate hike & Nigerians paying more for petrol

 March 18

Premium Motor Spirit (Petrol) Price Watch February 2024

The National Bureau of Statistics will on Monday, March 18, publish the Premium Motor Spirit (petrol) price watch for February 2024.

The average retail price paid by consumers for Premium Motor Spirit (Petrol) in January 2024 increased by 159.92 percent to N668.30.

Read also: Demands from FG won’t impact petrol price, says NARTO

With the removal of the petrol subsidy in May 2023 by President Bola Tinubu, the petrol prices have tripled from N184 per litre, causing public transportation providers such as buses, tricycles and motorcycles to raise transportation fares.

The country’s inflation rate, a measure of the general price level, rose to 31.3 percent in February from 29.9 percent in January.

National Household Kerosene Price watch February 2024

The National Bureau of Statistics will also release the National Household Kerosene Price watch for February 2024.

In January, the average retail price per litre of Household Kerosene (HHK) paid by consumers was N1,329 per litre, a decline of 2.40 percent compared to N1,362 recorded in December 2023.

On a year-on-year basis, the average retail price per litre of the product rose by 15.27 percent from N1,153.40 in January 2023.

Read also: Oghogho Effiom, Africa Regional Director, Society of Petroleum Engineers (SPE)

March 20

FOMC interest-rate decision/ Fed Chair Powell press conference

The Federal Open Market Committee will meet March 19-20, announcing the target Federal Funds rate on March 20 at 2 p.m. ET.

The current target range is 5.25 percent to 5.5 percent and that is not expected to change.

However, recent statements from Fed officials have suggested that interest rates are unlikely to increase from current levels and that cuts could be coming soon but are not imminent.

Inflation has declined from peak levels but has not reached the Fed’s 2 percent annual target. The most recent Consumer Price Index report for February showed 3.2 percent annual inflation.

According to reports, the Fed is watching the data and is hoping to have confidence that inflation is on course to return to its 2 percent goal before committing to rate cuts.

Liquefied Petroleum Gas (Cooking Gas) Price Watch February 2024

The National Bureau of Statistics will also release the Liquefied Petroleum Gas (Cooking Gas) Price Watch for February 2024 this week.

In January, the average retail price for refilling a 5kg Cylinder of Liquefied Petroleum Gas (cooking gas) increased by 3.55 percent on a month-on-month basis from N4,962 recorded in December 2023 to N5,139 in January 2024.

On a year-on-year basis, this increased by 12 percent from N4,588 in January 2023.

Read also: Gas suppliers to Nigeria Govt: Stop dollar payment for petroleum product or we go on strike

BusinessDay earlier reported that the price of cooking gas was as high as N1,300 per kg, this is a sharp increase, up from less than N500 in 2018 adding another layer of burden to an already strained population.

Experts point to a complex interplay of factors behind the surge. The ongoing global energy crisis, coupled with the devaluation of the naira, has pushed up international LPG prices.

Additionally, local challenges like limited storage capacity and transportation hurdles are exacerbating the issue.

Although Nigeria boasts of over 200 trillion of natural gas reserves which puts her among the top ten countries with the largest gas reserves in the world, low investment has resulted in her being an importer of LPG

March 22

Selected food prices

The National Bureau of Statistics will on the 22nd of March release selected food prices for February 2024.

In January, the food inflation rate for January 2024 totalled 35.41 percent, an increase from 24.32 percent observed in January, highlighting a pronounced rise in the cost of food items.

The key drivers of this inflationary pressure include notable price hikes in essential food commodities such as bread and cereals, potatoes, yams and other tubers, oils and fats, fish, meat, and fruits, as well as coffee, tea, and cocoa.

The top 10 food items that have recorded the highest price increase in one year as of January 2024, according to the selected food price report of the NBS were plantain (unripe), sweet potato, plantain (ripe), yam tuber, rice local sold loose, onion bulb, rice medium-grained, broken rice (ofada), Irish potato and chicken feet.

Read also: Weaker Naira fuels cross-border Petrol market

Transport Fare Watch (February 2024)

The transport fare watch, which measures price movement in the month of February, is also due for release this week.

In January, the NBS reported that travellers in the country paid N7,577 as transport fare for intercity bus journeys in January this year, representing 89.50 percent higher than the N3,998 paid by them in January 2023.

On a month-to-month basis, it increased by 2.36 percent from N7,402 paid in December 2023.

With the removal of the petrol subsidy in May 2023 by President Tinubu, the petrol prices have tripled from N184, causing public transportation providers such as buses, tricycles and motorcycles to raise transportation fares.

The rising fares have a direct impact on inflation, which has already been plaguing the Nigerian economy. With transportation costs eating into household budgets, the ability to afford necessities becomes increasingly difficult.