New petrol price means deteriorating purchasing power for Nigerians

Fuel queues have resurfaced across the states in Nigeria as the marketer hoard the product, awaiting the final position of the government on new prices of petrol.

Pump price of petroleum motor spirit has skyrocketed across the cities to above N500 per liter following the new government’s Monday announcement of the end to fuel subsidy.

The citizens are already bracing up for mounting inflation and deteriorating purchasing power in the coming months, following the increased price of petroleum.

With inflation already above 22% in April, business owners and manufacturers will content with increasing cost of production in the coming months just as workers’ disposable income diminishes with rising price of products and services.

Meanwhile, WTI crude futures fell almost 2% to below $68.5 a barrel on Wednesday, extending the monthly loss for May to nearly 11%, amid concerns surrounding a slowdown in demand, mainly from top crude importer China.

Fresh PMIs for the second-largest economy pointed to a further drop in factory activity and a slowdown in services and construction in May, highlighting the lacklustre nature of the ongoing recovery and the weakening demand for commodities.

Further, markets remain divided on whether OPEC+ will cut production during a meeting on June 4 after Saudi Arabia Energy Minister Prince Abdulaziz bin Salman warned short sellers to “watch out” for potential consequences last week.

In contrast, Russian Deputy Prime Minister Alexander Novak stated that he anticipated no new measures from OPEC+ as the group just implemented production cuts this month.

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