Fuel Scarcity, Electricity Tariff to Push Inflation to 15.81%—Meristem

March 14, 2022
inflation rate

By Aduragbemi Omiyale

Inflation in Nigeria for the month of February 2022 will jump to 15.81 per cent, analysts at Meristem have predicted.

The National Bureau of Statistics (NBS) is expected to release the figures on Tuesday, March 15 and from the analysis, the rise in inflation is expected to be influenced by fuel scarcity and an increase in electricity tariff.

Last month, the nation was plunged into another scarcity of premium motor spirit (PMS), commonly known as petrol, as a result of the importation of contaminated fuel into the country.

This development caused a disruption in the supply chain and coupled with the ongoing war in Ukraine by Russia, which has led to a shortage of fuel in Europe.

In its report, Meristem said “the current fuel scarcity gives us reasons to expect a spike in headline inflation in February.

“The effectively higher PMS prices and the resulting increase in transport cost should be a major trigger to core inflation.”

It further said, “On the other hand, we envisage that imported inflation would reflect more on food prices in the month, given Nigeria’s sizable consumption of wheat and wheat-based products (the tension in Europe has caused an increase in the price of cereals and grains).

“Based on our assessment, the key risk factors to core inflation in February include; the upward review of electricity tariffs and soaring crude oil prices. Based on these, we expect headline inflation to rise by 15.81 per cent YoY in February 2022.”

Business Post reports that last month, the stats office said the inflation rate in January 2022 increased by 15.60 per cent but the clog in the wheel of global economic growth caused by the Russia-Ukraine crisis is giving many sleepless nights.

The tension has prompted the imposition of strict economic sanctions on Russia, which could see the country’s growth plunge by as much as double-digit.

The immediate impact of the crisis is seen on commodity prices, especially crude oil and cereals, where Russian supply to world markets is significant.

Aduragbemi Omiyale

Aduragbemi Omiyale is a journalist with Business Post Nigeria, who has passion for news writing. In her leisure time, she loves to read.

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