With no end appearing to be in sight to the debilitating fuel crisis in the country, the Central Bank of Nigeria (CBN) has stepped forward to intervene in the matter, raising hopaces of a quick resolution.
The CBN bank governor, Godwin Emefiele, who revealed this move yesterday at the month’s meeting of the Monetary Policy Committee of the CBN, said the bank would take measures to mitigate the impact of the fuel crisis on the Nigerian economy by engaging with key government agencies.
The apex bank is looking to help improve the supply and distribution of the commodity across the nation.
This is coming two months after the importation of the off-spec petrol which plunged the country into fuel scarcity of massive proportions. The Russia-Ukraine war has also resulted in supply shortage for import-dependent countries like Nigeria.
The CBN governor said the bank would first be engaging with the Nigerian National Petroleum Company (NNPC) Limited towards finding ways to end the lingering petrol scarcity, which had pushed up the price of petrol to between N165 and N230 per litre, while diesel sells for between N700 and 800/litre in the last eight weeks.
Emefiele pointed out that the substantial upward push to price levels continued to be influenced by supply-side factors such as the scarcity of PMS, persisting insecurity and backlash from the Russia-Ukraine war. These require a careful and focused policy intervention to address and resolve.
He expressed belief that a reduction in the arbitrary prices of petrol and diesel would automatically result in gradual moderation in prices of the products, which would ultimately result in the moderation in the prices of other products whose prices would have gone up as a result of the arbitrary increase in the prices of these items.
“If these actions are taken, we are positive that inflation will come down,” he said.
The CBN governor further stated that product scarcity was responsible for the arbitrary increase in the prices of diesel and petrol across the country. He expressed concern that the increase in energy prices was a major cause of the rise in headline inflation that rose to 15.7 per cent in February.
This is as NNPC Ltd. has dismissed a report that it had increased prices of petrol at the depots. In a statement shared via its social media channels, it advised the public and relevant stakeholders to disregard the information.
“It is fake news obviously concocted to cause confusion and to undermine the progressive drive of the NNPC to restore normalcy to the market,” it said.
On electricity, Emefiele said the apex bank would also partner with power sector regulators to address the challenges still affecting stable power supply in Nigeria. He said the recent nationwide blackout as a result of collapse of the national grid had also increased the demand for diesel to power private generators, and, by implication, increased demand in the already scarce product.
“We will be engaging with the power minister, NBET and NERC to see whatever we can do to support them,” the CBN governor stated.
According to him, the CBN had disbursed over N1.3 trillion in the last five years to support both the power generating and distribution companies. The facility was to improve capacity of the power sector to meet national demand and for the system to continue to operate.
On the call by the International Monetary Fund (IMF) on the CBN to scale back its intervention schemes, Emefiele said the apex bank was simply deploying homegrown solutions through its development finance mandate to support the fiscal arm of the government by providing support facilities to businesses, individuals and households.