Why the new prices of petrol, may push inflation to 30% – Yemi Kale says

Yemi Kale, partner and chief economist at KPMG Nigeria, says the new prices of premium motor spirit (PMS), also known as petrol, may add about 6 percent to Nigeria’s inflation rate.

The consumer price index (CPI), which measures the rate of change in prices of goods and services, climbed to 22.22 percent in April 2023 — the fourth consecutive surge in Nigeria’s inflation figure since the year started.

Analysing the implications of the new petrol price on the country’s inflation figure, Kale said the inflation rate may increase to 30 percent in June 2023.

However, the former statistician-general of the National Bureau of Statistics (NBS) said the CPI for May would not be impacted.

“Using the NBS CPI model+my macro model, the new PMS prices may add about 6 percent to CPI in June over whatever is reported in May, holding other things constant,” he tweeted.

“April was 22.22 percent and May is unknown and won’t be affected. So, June will be somewhere about 30 percent. Not as bad as I expected.”

Using the NBS CPI model+my macro model, the new PMS prices may add about 6% to CPI in June over whatever is reported in May, holding other things constant. April was 22.22% & May is unknown & won’t be affected. So June will be somewhere about 30%. Not as bad as I expected.

— Dr Yemi Kale (@sgyemikale) June 2, 2023