Inflation Eases To 14.63% As Food Prices Moderate, FAAC Shares N2.428trn For September

BY NSE ANTHONY-UKO, Abuja AND OLUSHOLA BELLO, Lagos

Nigeria’s headline inflation eased to 14.63 per cent in September 2026, from 15.39 per cent in August, as food prices moderated, but the relief was tempered by a sharp surge in energy costs

This is as the Federation Account Allocation Committee (FAAC) distributed N2.428 trillion among the Federal Government, states and local councils from revenues in September, 2026.

The National Bureau of Statistics’ (NBS) September 2026 Consumer Price Index (CPI) report, released on Thursday, showed that Nigeria’s headline inflation rate eased to 14.63 per cent in September 2026, from 15.39 per cent in August.

However, the energy inflation rate more than doubled on a year-on-year basis to 10.85 per cent in September 2026, rising sharply from 4.69 per cent in August as energy price pressures intensified across the country.

According to the NBS, energy inflation increased by 6.16 percentage points between August and September, representing a 131.34 per cent surge in the annual rate within one month.

On a month-on-month basis, energy inflation rose to 5.38 per cent in September, reversing the 0.36 per cent decline recorded in August. This indicates a renewed increase in energy prices following the marginal reduction observed in the preceding month.

Food inflation stood at 19.59 per cent year-on-year. On a month-on-month basis, it was -1.55 per cent, meaning food prices fell during the month.

The NBS attributed the moderation in food prices to changes in the average prices of several food items, including local short-grained rice, maize flour, guinea corn flour, fresh onions, palm oil, fresh tomatoes, okra, Irish potatoes, plantain and eggs.

An analysis of the NBS monthly CPI reports shows that energy inflation has been highly volatile throughout 2026, with sharp increases followed by significant declines.

The latest figures show that September recorded the third-highest annual energy inflation rate in the first nine months of 2026, behind February and January.

They also indicate that the renewed pressure on energy prices has interrupted the relatively low inflation readings recorded in July and August.

The renewed acceleration in energy inflation comes amid sustained increases in domestic fuel prices following the outbreak of the war involving Iran, Israel and the United States, which has disrupted global oil markets and driven up crude oil prices.

Before the Middle East conflict began, petrol sold for approximately N830 per litre in Nigeria. However, prices have since climbed above N1,400 per litre in several parts of the country.

In September, that filling stations in Lagos sold petrol for between N1,400 and N1,430 per litre, while prices in Abuja ranged from N1,400 to N1,450 per litre.

Energy-related expenses, including petrol, diesel and electricity, ranked highest among the factors influencing inflation perceptions, scoring 74.1 points among businesses and 61.9 points among households.

The findings underscore the significant burden of energy costs on Nigerians, particularly as higher fuel and electricity expenses affect business operations, transportation and household finances.

The federal government has recently introduced measures aimed at reducing petrol costs and easing the pressure of high fuel prices on consumers, particularly public transport operators.

The inflation and energy-cost pressures emerged as the Federation Account Allocation Committee (FAAC) shared N2.428 trillion as September 2026 Federation Account Revenue among the Federal Government, States and Local Government Councils.

A statement from the Office of the Accountant-General of the Federation’s Director (Press and Public Relations), Bawa Mokwa, on Thursday, noted that the revenue was shared at the October 2026 FAAC meeting held in Abuja.

The N2.428 trillion total distributable revenue comprised distributable statutory revenue of N1.672 trillion and distributable Value Added Tax (VAT) revenue of N756.587 billion.

A communiqué issued by FAAC indicated that total gross revenue of N3.913 trillion was available in the month of September 2026. Total deduction for cost of collection was N131.758 billion, while total transfers, refunds and savings were N1.352 trillion.

According to the communiqué, gross statutory revenue of N3.096 trillion was received for the month of September 2026. This was higher than the sum of N2.850 trillion received in the preceding month by N246.384 billion.

Gross revenue of N816.872 billion was available from VAT in September 2026. This was lower than the N834.843 billion available in the month of August 2026 by N17.972 billion.

The communiqué stated that from the N2.428 trillion total distributable revenue, the Federal Government received a total sum of N832.242 billion and the State Governments received a total sum of N799.872 billion.

The Local Government Council received N560.660 billion, while the sum of N236.049 billion (13% of mineral revenue) was shared to the benefiting State as derivation revenue.

On the N1.672 trillion distributable statutory revenue, the communiqué stated that the Federal Government received N756.583 billion and the State Governments received N383.749 billion.

The Local Government Councils received N295.855 billion, and the sum of N236.049 billion (13% of mineral revenue) was shared to the benefiting States as derivation revenue.

From the N756.587 billion distributable VAT revenue, the Federal Government received N75.659 billion, the State Governments received N416.123 billion, and the Local Government Councils received N264.805 billion.

In September 2026, Petroleum Profit Tax (PPT), Hydrocarbon Tax (HT), Petroleum Royalties, Import Duty, CET Levies and Excise Duty increased significantly, while Companies Income Tax (CIT), CGT & SDT, Value Added Tax (VAT), Mineral Royalties, and Gas Flared Penalty, Rental Gas Flared Fee and Misc. Oil Revenue decreased considerably.

The revenue figures provide fiscal context for the government’s response to rising energy costs. Higher petroleum-related receipts could strengthen the case for targeted relief measures, while the government’s 30-day NNPC petrol discount is intended to cushion transport operators and commuters without a formal return to subsidy.

Commenting on the development, Centre for the Promotion of Private Enterprise (CPPE) has said monetary easing should remain calibrated to support productive investment without compromising gains in macroeconomic stability.

In its Policy Brief on the September 2026 Inflation Report released yesterday, the chief executive officer, CPPE, Dr. Muda Yusuf said the moderation in headline inflation has important implications for monetary policy direction.

“The relative stability of the foreign exchange market has also helped to moderate imported inflation and improve business planning,” Yusuf stated.

According to Yusuf, with inflation moderating, the case for further monetary easing has strengthened, particularly given the elevated cost of credit and its adverse consequences for investment, working capital and productive capacity.

“Monetary easing should remain calibrated to inflation expectations, exchange rate conditions and emerging energy-price risks. The objective should be to support productive investment without compromising the gains in macroeconomic stability,” he said.

Yusuf warned that while headline and core inflation moderated on a year-on-year basis, monthly indicators show renewed pressures, saying that “monthly core inflation increased from -0.06 per cent in August to 1.11 per cent in September, while monthly energy inflation surged from 0.36 per cent to 5.38 per cent. Year-on-year energy inflation stood at 10.85 per cent.”

He also noted that food inflation remains a major threat at 19.59 per cent, exceeding headline inflation by 4.96 percentage points, while urban inflation exceeded rural inflation by 3.18 percentage points.

He disclosed that the September report strengthens the case for a more balanced inflation-management strategy, noting that many remaining inflationary pressures are rooted in structural and supply-side constraints.

The Centre recommended six priorities to consolidate disinflation: sustaining prudent monetary easing, prioritising food affordability, reducing energy costs, recalibrating monetary and trade policies to ease supply-side challenges in agriculture and manufacturing, improving logistics efficiency, and strengthening subnational coordination.

“The measures include gradually reducing interest rates while safeguarding forex stability, addressing insecurity in farming communities and post-harvest losses, accelerating electricity reforms and CNG expansion, investing in roads and storage, eliminating multiple levies and checkpoints, and ensuring federal, state and local governments coordinate reforms to lower production and distribution costs,” it stated.

Yusuf added that “the policy challenge is therefore twofold: sustain disinflation through credible macroeconomic management and address the structural factors that keep production, energy, transportation and food costs elevated. This requires sustained collaboration among the federal, state and local governments, with greater emphasis on productivity, infrastructure, security, energy efficiency and domestic supply capacity.”