Latest Fuel Price Hike May Worsen Inflation In Nigeria – World Bank

The World Bank has cautioned that the recent rise in Premium Motor Spirit (PMS), commonly referred to as petrol, in September could disrupt the country’s disinflationary trend.This warning was issued in the October edition of the Africa’s Pulse report released recently.

In May 2023, President Bola Tinubu officially ended petrol subsidies in Nigeria, causing prices to soar from N175 per litre to over N1000 nationwide. As a result, inflation surged, reaching 32.70% in September 2024, according to the National Bureau of Statistics (NBS) Consumer Price Index (CPI) report published on Tuesday.

The international financial institution indicated that the recent inflation spike may be linked to the 40-45% increase in petrol prices. The report noted, “While the inflationary impacts of a weakened naira earlier this year and the removal of the gasoline subsidy in the latter half of 2023 seemed to be easing, the additional 40-45% rise in gasoline prices in September could reverse the disinflationary trend.”

Furthermore, the World Bank projected Nigeria’s economic growth at 3.3% for 2024 and 3.6% for 2025-26 as macroeconomic and fiscal reforms begin to take effect.