How removal of petrol subsidies will impact Nigeria's economy

Nigeria's Department of Petroleum Resources recently issued a warning that the pump price of petrol could skyrocket to about a thousand Naira per liter if subsidies on petrol are removed. Mayowa Ige, a Research Analyst at Financial Derivatives Company, joined CNBC Africa to discuss the potential implications of such a move. Ige expressed skepticism about the likelihood of petrol prices reaching such exorbitant levels, citing the government's focus on inflation and the economy as key factors that would likely prevent such a drastic price hike. The removal of petrol subsidies has sparked concerns about the overall impact on the Nigerian economy. Despite the uncertainty surrounding petrol prices, the country is facing other challenges in sectors like sugar importation and alternative energy sources. The restriction on sugar importation to only three companies has raised questions about potential price hikes in the sugar industry, with fears of monopolistic practices potentially driving up costs for consumers. On the bright side, the push for ethanol production from sugar byproducts offers a glimmer of hope for Nigeria's energy sector, providing an alternative to traditional sources like oil. Looking ahead to monetary policy decisions, Nigeria's Central Bank is set to announce its position on interest rates, with expectations leaning towards maintaining current rates. Factors such as inflation, money supply, exchange rates, and economic growth will play a crucial role in shaping the Central Bank's decision. With uncertainties looming, stakeholders will closely monitor developments in Nigeria's economy to gauge the potential impact of policy changes on various sectors.