Nigeria’s Disinflation Slows As Energy Costs Threaten Fresh Price Surge
By OBIOMA TORI
NIGERIA’S recent inflation relief is beginning to weaken, as rising energy and transport costs threaten to undo three months of easing prices. Analysts expect October inflation to decline slightly to 16.29% year-on-year, but month-on-month data shows underlying pressures building.
A combination of factors — higher fuel prices, logistics disruptions, and festive-season demand — is tightening the squeeze on households and businesses. The PENGASSAN strike triggered sharp spikes in petrol and cooking gas prices, which have spilled into transport fares and production costs nationwide. Even as supply stabilises, the lingering effects continue to push up core inflation.
Food prices remain the main source of relief. The ongoing harvest season has improved the availability of staples, easing pressure in key markets. But traders say high transport costs are preventing consumers from fully benefiting from lower farm-gate prices, especially in southern states.
A stabilising naira has helped contain imported inflation, but domestic cost pressures — particularly energy and logistics — now pose the greatest threat to price stability. With December approaching, analysts warn that festive-related demand could accelerate monthly inflation again, especially if marketers slow fuel distribution in response to new levies on imported petroleum products.
These trends tighten the dilemma for the Central Bank of Nigeria ahead of its next policy meeting. Despite improving annual inflation figures, the persistent monthly pressures mean monetary easing is unlikely. Tight policy, analysts say, will remain in place until disinflation becomes more durable.
As the year draws to a close, Nigeria faces a fragile inflation outlook: food-driven easing on one hand, energy-driven volatility on the other. The coming months — shaped by fuel supply, FX stability, and festive demand — will determine whether the country can sustain its path toward lower inflation in 2026.
