CBN Gov hints of reduction in petroleum prices

CBN Gov hints of reduction in petroleum prices

The Governor, Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso has hinted that prices of petroleum products will experience reduction in the course of the year and this will have a positive impact on the economy.

He stated this at the unveiling of the Nigerian Economic Summit Group’s (NESG) 2024 Macroeconomic Outlook in Lagos on Wednesday.

He said the anticipated moderation in pump prices of Premium Motor Spirit (PMS) due to the expected operational status of the country’s key government and privately-owned refineries in 2024 is a pivotal factor in the economic equation.

“The expected stabilization or reduction in fuel costs is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience”, he said.

He added that “Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4 percent. This will be aided by improved agricultural productivity and the easing of global supply chain pressures, benefiting businesses by boosting consumer confidence and purchasing power.

“The CBN’s adoption of the inflation-targeting framework involves clear communication, use of monetary policy instruments, and collaboration with fiscal authorities to achieve price stability, fostering market confidence and positively influencing consumer behaviour.

“The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lowered policy rates, stimulating investment, fueling growth, and creating job opportunities. Additionally, the bank has reverted to the conventional monetary policy approach with a focus on attaining price stability, which fosters sustainable economic growth for Nigeria”.

On the initiatives on foreign exchange, Cardoso said the bank’s collaboration with the Ministry of Finance and the NNPCL to ensure that all FX inflows are returned to the Central Bank is yielding results as the coordinated effort will greatly enhance the bank’s FX flows and contribute to the accretion of reserves.

He said, “The expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN. This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage.

“The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment, elevating Nigeria’s appeal to global investors.

“We are implementing a comprehensive strategy to improve liquidity in our FX markets in the short, medium, and long term and our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years”. (Independent)