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Diesel Price Drop: Dangote moves to combat Nigeria’s inflation

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Nigerian billionaire businessman Alhaji Aliko Dangote has expressed optimism that the reduction in diesel prices sourced from his refinery, from N1,650 to N1,200, will contribute to a decrease in Nigeria’s inflation rate.

This move is anticipated to provide immediate relief to the country’s inflation woes, with Dangote’s refinery also playing a role in stabilizing the naira, improving the exchange rate from N1,900 to N1,250.

While briefing newsmen following his homage visit to President Bola Tinubu for Eid-el-Fitr in Lagos on Wednesday, Dangote said there has been considerable economic progress recently, indicating that the country is on the right path.

Dangote stated that his refinery is offering diesel at N1,200, below the market rate of N1,650, and he believes this will contribute to lowering inflation in the country.

“I believe that we are on the right track. I believe Nigerians have been patient and I also believe that a lot of goodies will now come through. There’s quite a lot of improvement because if you look at it, one of the major issues that we’ve had was the naira devaluation that has gone very aggressively up to about N1,900.

“But right now, we’re back to almost N1,250, N1,300, which is a good reprieve. Quite a lot of commodities went up. When you go to the market, for example, something that we produce locally like flour, people will charge you more. Why? Because they’re paying very high diesel prices.

“Now, in our refinery, we started selling diesel at about N1,200 instead of N1,650 and I’m sure as we go along, things will continue to improve quite a lot.

“If you look at it now, when you are buying N1,650 or N1,700 for a litre of diesel, and that one has been cut off by almost two-thirds, you are now paying N1,200 for diesel.

“This can help to bring inflation down immediately. And I’m sure when the inflation figures are out for the next month, you’ll see that there’s quite a lot of improvement in the inflation rate,” Dangote said.

Meanwhile, Nigeria’s inflation rate currently remains very high, standing at 31.70 as of February 2024, according to the National Bureau of Statistics (NBS).

The inflation was driven mainly by rising food prices and the removal of petrol subsidy by President Bola Tinubu in May 2023.

Also, in response, the Central Bank of Nigeria (CBN) has rolled out multiple monetary policies to reduce inflationary pressure in the country, including raising the Monetary Policy Rate (MPR) – the benchmark interest rate – to 24.75%, the highest in decades.

 

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