New fuel price pushes inflation to 12.6 per cent in January

Minister of Finance, Ngozi Okonjo-Iweala

The National Bureau of Statistics (NBS) says Composite Consumer Price Index, which measures inflation in the country, rose sharply to 12.6 per cent year-on-year basis in January 2012.

This figure is about 2.2 percentage points higher than 10.3 per cent recorded in the previous month. The monthly composite CPI rose significantly by 3.4 per cent when compared with figure for December 2011.

The bureau attributed the increase in the headline index, composed of the “Core” and Food indices, to the partial removal of the subsidy on Premium Motor Spirit (petrol), or petrol, which raised the price of litre of the commodity by 49.12 percent from N65 to N97 per litre.

Consequently, prices of several food and non-food items grew by over 100 percent as a result of the increase in transportation costs.

Further breakdown showed that urban inflation rate recorded a sharp increase when compared with the rural figure in January 2012.”The year-on-year increase for urban and rural dwellers was 16.4 and 9.7 percent respectively,” the bureau said. “The inflationary impact of the partial subsidy removal was therefore largely concentrated in the urban areas relative to rural areas where majority of Nigerians live.” 

The NBS noted that inflation rate, though significant, it was moderated by the Central Bank of Nigeria (CBN) through its proactive monetary policy which it started in the second half of 2011.It said that but for the partial removal of subsidy, inflation was expected to have dropped to between 8 and 9 percent in January thisyear.

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