Aliko Dangote, the chairman of the Dangote Group, has announced that his refinery’s decision to sell diesel at reduced prices would help alleviate Nigeria’s Inflation problems. He shared this information during a visit to President Bola Ahmed Tinubu’s home in Lagos to celebrate Eid-al-Fitr. During a conversation with reporters, he mentioned that the Naira has shown signs of improvement lately, with its exchange rate falling from approximately ₦1,900 to the dollar to the current range of ₦1,250 to ₦1,300.
According to data released by the National Bureau of Statistics, the inflation rate rose to 31.70 percent in February from 29.90 percent in January 2024. Despite this increase, Dangote remains hopeful about the economic outlook, predicting that lower fuel prices will play a key role in lowering inflation in the near future. His statement highlighted the significant progress that has been made in addressing a major issue of narrow devaluation, which had seen a positive improvement as the value has now stabilized.
Items produced locally are being sold at higher prices.
Prices have increased noticeably in many areas. For instance, when one visits the market, items produced locally, such as flour, are being sold at higher prices. This is primarily due to the rising costs of diesel. In response, their refinery has reduced the price of diesel to ₦1,200 from ₦1,650. He expressed confidence that as time goes on, there will be significant enhancements. Despite rising crude prices, he believes diesel prices will not increase significantly from their current levels.
The price could potentially drop which could have a significant impact. For instance, if one is transporting items like rice that are locally produced, currently costing ₦1,650, paying only two-thirds of that amount would bring comfort. This reduction is substantial and often goes unnoticed. This decrease could swiftly lower inflation rates. He is confident that once the inflation data for the following month is released, they will observe a significant improvement in the inflation rate.
Businesses and government should collaborate on the situation.
They must take things one step at a time. He explained that he has full confidence that the government is diligently working day and night to improve the situation. This is not only beneficial for themselves but for all people as well. The leader of the Dangote Group further encouraged business leaders to collaborate with the government in order to enhance the well-being of the people in Nigeria. He emphasized the importance of both parties working together harmoniously for the benefit of all citizens.
Tinubu, the President, expressed admiration for the chairman of Dangote Group, commending his consistent backing of young entrepreneurs in Nigeria and recognizing him as a pillar of the business world who has enhanced the country’s image as a thriving hub for commerce. Ajuri Ngelale, the president’s media adviser, conveyed a message expressing the president’s participation in honouring the legacy of Dangote, the visionary behind West Africa’s largest industrial conglomerate and a prominent business leader in Africa. Tinubu praised Dangote for his numerous industrial achievements, acknowledging his bold creativity and unwavering commitment to excellence in all his undertakings.
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An increase in diesel prices in Nigeria can have a significant impact on the economy, as diesel is a crucial fuel source for transportation, agriculture, manufacturing, and Electricity generation. Higher diesel prices can lead to inflation, as increased transportation costs can drive up the prices of goods and services across the economy. This can reduce the purchasing power of consumers and potentially slow down economic activity. Additionally, businesses that rely on diesel generators for power may experience higher production costs, leading to increased prices for their products and potentially affecting their competitiveness in the market.