Report: Cooking Gas Prices Rose 128% in 2021

Report: Cooking Gas Prices Rose 128% in 2021

Emmanuel Addeh in Abuja

A new report by the Financial Derivatives Company (FDC) Limited has revealed that prices of cooking gas rose by 127.8 per cent in 2021.

The Lagos-based research and consultancy firm also estimated in the report obtained yesterday, that the country’s income per capita shrank by three per cent to $2,100 last year, with Nigeria hit by two recessions in two years.

With life expectancy at 55.75 years, the fourth lowest in the world, and unemployment rate at 33.3 per cent, still the 4th highest in Africa, the report stated that Nigeria’s misery index hit 48.7 per cent last year.

Added to that, the FDC document indicated that 93.3 million Nigerians are currently neck-deep in poverty, even as diaspora remittance dropped by 26.09 per cent to $17 billion.

In addition, it disclosed that house rent rose by 50 per cent, particularly on Lagos mainland, while diesel prices increased 79.5 per cent.

Furthermore, the research firm noted that flour prices recorded a 52.3 per cent increase, beans increased by 166 per cent while the price of table water generally surged by 100 per cent.

With a Gross Domestic Product (GDP) of $432.9 billion, according to the Bismarck Rewane-led FDC, oil production in the country slumped by 12.88 per cent when compared with 2020.

Still on the oil market, the company predicted a bullish scenario analysis of $120 per barrel in 2022, which it said could increase the country’s foreign exchange earnings, with an optimistic 1.9 million barrels daily oil production.

It also made a forecast that petrol subsidy removal in the first quarter of 2022 and the Dangote refinery launch in the fourth quarter would increase government revenues, leading to a fiscal surplus with exchange rate estimated to appreciate to N520 to a dollar on the parallel market and inflation at 13 per cent.

According to the firm, this will lead to increased infrastructure spending to stimulate growth.

In a base case scenario, FDC predicted oil price at $80 per barrel, leading to sustained fiscal pressures.

According to the report, in 2021, the promise was for hope where many were elated at the expectations of a better year with less travel restrictions, reduced Covid-19 cases, a more proactive and accountable government and better living standards.

“Although this was not the case 100 per cent with the ups, downs and bumps along the road, we admit that the roller-coaster ride of 2021 was better that the merry-go-round of 2020.

“While some are grateful with their arms wide open and hearts expectant for a better 2022, others are keeping their fingers crossed considering the bittersweet experiences 2021 had to offer,” it stated.

It added that the price of domestic commodities were currently high and expected to climb further once fuel subsidy was removed and cost reflective electricity tariffs are implemented.

“Meanwhile, income levels are the same,” FDC noted.

The group predicted that the first half of 2022 would be characterised by aggressive reforms and the incumbent government embarking on ambitious infrastructure projects to garner the trust of the public as the elections approach.

But in the second half of 2022, the report stated that it would be all about politics as campaigns were expected to commence.

But it noted that this time around, the dynamics might change due to the e-voting system.

“But the impact is likely to be the same. Money supply could increase further stoking inflationary pressures, reforms will slow down and political tensions could rise,” it said.

At the moment, FDC noted that many are sunk in bigger hope for a better year, stressing that the best case scenario would be less COVID-19 cases, no new variants, higher oil price and production levels and a seamless transition into the election year.

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