By Obafemi Oredein

Special to Dow Jones Newswires


IBADAN, Nigeria--Nigeria's annual inflation rate rose to 22.79% in June from 22.41% a month earlier, the country's National Bureau of Statistics said in a report Monday.

This is the sixth consecutive month that the West African country's inflation rate rose. The rate had slowed to 21.3% in December but accelerated again over the past six months.

Food inflation, which accounts for agricultural products, increased to 25.25% in June from 24.82% in the previous month, the NBS said in the report.

The rise in food inflation was caused by increases in the prices of oil and fat, bread and cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetables, milk, cheese, and eggs.

However, the overall increase in prices was largely due to a hike in electricity tariffs and energy prices.

The price of diesel oil used in heavy transport is currently at 800 to 850 Nigerian naira ($1.03-$1.09) a liter compared to NGN350 to NGN400 a year ago.

Petrol prices have more than doubled since the end of May, when the government of President Bola Tinubu removed a subsidy on petroleum products. The subsidy, which was in place for several years, made imported petrol cheaper than its actual landed cost and has been a huge drain on government revenue, according to the Nigerian National Petroleum Co.

Dealers across the country are currently selling petrol at between 480 and 550 Nigerian naira a liter, up from NGN195 before the removal of the subsidy.

A decision by the Central Bank of Nigeria to allow a free float of the national currency against the dollar and other global currencies, which resulted in a depreciation of the naira, has further pushed up prices of other goods.

The hike in petrol prices and depreciation of the naira have resulted in sharp increases in the prices of food, transportation, housing, medicines, groceries and other essential items, an economist said. He added that the central bank's decision has also pushed up production costs in the manufacturing sector, affecting employment.


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(END) Dow Jones Newswires

07-17-23 1035ET