Central Bank of Nigeria’s plan to rein in inflation that’s a at five-and-a-half-year highmay prove to be even more difficult after diesel prices tripled in June and show little signs of relenting.

Average diesel prices increased 203% from a year earlier in June to 733.8 naira ($1.74) a liter, according to data published by the National Bureau of Statistics on Wednesday. That’s the highest level since at least June 2016, its data shows. Diesel prices have risen further to 780 naira a liter this month. 

The statistic office does a monthly survey of fuel prices that are deregulated and used to calculate inflation data. 

The high prices are likely to stoke inflation that the CBN’s monetary policy committee said Tuesday it is focused on quelling as it raised its benchmark interest by 100 basis points. Governor Godwin Emefiele said high levels of price growth has “negative consequences, particularly on the purchasing power of the poor, as well as retarding growth.”

Diesel prices have surged since Russia invaded Ukraine in February. Nigerian businesses and most of its population rely on the fuel because of a shortage of power. Poor maintenance and insufficient investment in the transmission network have resulted in only about a third of the country’s installed capacity being dispatched by the grid daily -- a fraction of what’s needed in a nation of more than 200 million people.

Bloomberg