The World Bank has warned that the latest increase in the prices of Premium Motor Spirit (PMS) also known as petrol in September may reverse the disinflationary trend in the country.
The Bretton Wood institution gave the warning in its October edition of Africa’s Pulse report released recently.
President Bola Tinubu in May 2023, officially pronounced an end to petrol subsidies in Nigeria, raising the product prices from N175 per litre to over N1000 across the country.
Consequently, inflation spiked in the country hitting 32.70% in September 2024, according to the National Bureau of Statistics (NBS) Consumer Price Index (CPI) report released on Tuesday.
To this effect, the international lender has now warned that the recent spike in inflation may have been caused by the over 40-45% hike in the price of the petrol.
“While the inflationary effects of a weakened naira in the first months of this year and the removal of the gasoline subsidy in the second half of 2023 appeared to be gradually subsiding, a further increase in gasoline prices by 40-45 percent in September may reverse the disinflationary trend, ” the report stated.
The World Bank also pegged Nigeria’s economic growth at 3.3 percent in 2024 and 3.6 percent in 2025–26 as macroeconomic and fiscal reforms gradually start yielding results.
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