February 25, 2024

Soaring energy costs in Nigeria responsible for 19.64% July inflation rate -LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has stated that the high cost of aviation fuel, input prices spiked due to an increase in the price of diesel, worsening electricity crisis and slow adoption of alternative energy sources are major contributory factors to Nigeria’s inflation rate in the month of July 2022 which rose to a 17-year high of 19.64%.

This was disclosed by LCCI DG, Dr Chinyere Almona, who made this known on Monday in reaction to the  National Bureau of Statistics (NBS) consumer price index (CPI) report for July 2022 released on Monday.

Recall that the consumer price index (CPI), which measures the rate of change in prices of goods and services, surged to 19.64 percent in July 2022, up from 18.60 percent in the previous month.

The development indicates a 1.82% month-on-month increase — and the highest ever inflation rate recorded since September 2005.

The LCCI boss revealed that the major driver of the July inflation rate was the hike in the price of aviation fuel, Jet A1, which drove the cost of air transport to the roof.

Dr Chinyere Almona also noted that for manufacturers, input prices spiked due to an increase in diesel, coupled with the country’s electricity crisis worsening alongside a bumpy road to renewable energy deployment.

According to her, the FG’s intervention to alleviate the crisis has not impacted the inflationary pressures that keep rising month-on-month since 2005.

She urged FG to deploy a mix of both fiscal and monetary policies to tackle the core drivers of the inflation scourge in Nigeria.

Dr. Almona also urged that there should be targeted financing for critical sectors including agriculture, food processing, aviation fuels, transport, and foreign exchange availability for manufacturing inputs.

“A major worry is about the inflation scourge constraining production, causing job losses, and courting an imminent recession.

“It is obvious that the government’s intervention so far has not impacted the inflationary pressures that keep rising till now.

“Without concrete and quick steps to intervene, the rising tide of inflation rate may continue into the end of the year,” she said.