March 12 (Lagos) - Price of US crude has reached a four year low within just 2 months of the Presidency of Donald Trump who campaigned on reducing petrol prices. At the petrol pumps, price per gallon of fuel has declined sharply and is leading to much relief for the American consumers. It is likely to have a downward effect on overall inflation number when the data comes out later today.
The way inflation is calculated was changed by the previous Biden administration so we may not see the effects immediately but there is a strong under-current of prices coming down across the board in the USA and that could lead to increased consumer spending later on in the year.
WTI crude oil price was at $66.56/barrel in New York while the Brent crude oil price was at $69.83/barrel in London at the time of writing this article. Nigerian crude oil prices were hovering around $ 72 a barrel yesterday.
On the home front, petrol prices have also come down a bit following the reduction in price from the Dangote refinery. There are reports of a breakdown of the Naira for crude policy due to foreign loans of the NNPC.
Declining crude oil prices overall pose a risk to the Nigerian economy and the currency because Nigeria has failed to diversify away from crude oil when it comes to exports. It could be the reason why the Naira could not hold the minor gains it made against the USD last month when the government interventions dried up quickly.