Analysts Blame Fuel, Transport Costs For High Food Prices Despite Lower Inflation

BY OLUSHOLA BELLO AND FAVOUR OLOKUNGBОYE, Lagos

Despite Nigeria’s headline inflation rate declining to 14.63 per cent in September 2026, high fuel prices and transportation costs continue to limit relief for households, as prices of several food commodities remain elevated, traders and economic stakeholders have said.

LEADERSHIP reports that the National Bureau of Statistics (NBS) said headline inflation fell to 14.63 per cent in September from 15.39 per cent in August, representing a decline of 0.76 percentage points. The rate was also lower than the 20.98 per cent recorded in September 2025.

However, food inflation remained high at 19.59 per cent year-on-year, even as food prices declined by 1.55 per cent month-on-month. Monthly headline inflation also slowed to 0.06 per cent from 0.71 per cent in August.

Experts Warn

The Director and Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, described the September inflation report as a mixed picture, noting that headline and core inflation had moderated while food inflation remained elevated at 19.59 per cent.

He also pointed to the acceleration in monthly energy inflation to 5.38 per cent, warning that it reflected persistent supply-side pressures and the economy’s vulnerability to energy shocks.

Yusuf said food inflation was particularly severe for low-income households because food accounted for a significant proportion of their expenditure.

“Consequently, elevated food inflation erodes real incomes, deepens poverty risks and weakens household consumption,” he said.

He explained that as households devoted more of their income to food, less money remained for manufactured products, education, healthcare and other services. This weakened consumer demand and put pressure on businesses, particularly those dependent on household spending.

According to him, persistent food inflation reflected structural weaknesses in agriculture, including insecurity, poor rural infrastructure, high logistics costs, post-harvest losses and inefficient market connectivity.

“Addressing these constraints requires targeted supply-side interventions rather than reliance predominantly on monetary tightening,” Yusuf said.

LCCI Warns Rising Energy Costs

The President of the Lagos Chamber of Commerce and Industry (LCCI), Engr Leye Kupoluyi, also cautioned against interpreting the decline in inflation as evidence that the cost of living had fallen.

“The decline in the inflation rate should not be mistaken for a reduction in the overall price level. The cost of living remains elevated, and many households continue to struggle with food, transportation, housing, energy and other essential expenses,” he said.

Kupoluyi warned that increases in petrol and diesel prices during the third quarter and into the fourth quarter could threaten the disinflation process by raising costs across the economy.

He explained that higher energy costs were passed on through transportation, manufacturing, agriculture, distribution and retail, potentially offsetting the benefits of easing inflation.

The LCCI president urged monetary and fiscal authorities to coordinate policies that would sustain disinflation without unnecessarily constraining productive investment.

He also called for measures to address insecurity in food-producing areas, inadequate infrastructure, high logistics costs and inefficiencies across domestic supply chains.

Transport Costs Keep Food Prices Elevated

Market checks at Ile-Epo Market in Lagos on Saturday showed that seasonal harvests had reduced the prices of some commodities, including yam. However, higher transportation and distribution costs continued to push up the prices of other essential food items, leaving consumers struggling with household expenses.

The mixed price movements highlight the difficulty of translating easing inflation into meaningful relief for consumers, particularly as rising energy and logistics costs continue to influence the prices of goods transported from farming communities to urban centres.

A trader dealing in rice, beans and garri, Mr Daniel Chukuka, identified fuel prices and transportation expenses as major factors determining food prices.

According to him, fuel prices were relatively low at the beginning of August but rose towards the end of the month, contributing to changes in commodity prices.

He added that higher fuel prices in October had increased transport fares and the cost of moving goods to the market.

Chukuka explained that traders considered their purchase costs and prevailing market conditions when fixing selling prices, while competition among sellers also influenced how much they charged consumers.

Rice, Garri Prices Rise As Yam Becomes Cheaper

The impact of rising logistics costs was further highlighted by Mrs Joan Iheonu, a rice trader, who said the prices of some brands had increased despite the reported decline in inflation.

“They say inflation has dropped to 14.63 per cent. Which inflation? A bag of rice last month was ₦68,000; now it is ₦70,000 to ₦72,000, depending on the brand,” she said.

Iheonu attributed the increase partly to transportation costs, saying the cost of moving rice from Kebbi State to Lagos was about ₦18,000 per bag due to high diesel prices.

“How will price drop? Customers are complaining that there is no money. We now sell in small measures,” she added.

At Ile-Epo Market, a 50-kilogramme bag of Oloyin beans that sold for ₦160,000 in August remained at the same price in October, while a 50-kilogramme bag of rice declined marginally from ₦55,000 to ₦54,000.

In contrast, a 50-kilogramme bag of yellow garri increased from ₦20,000 to ₦23,000, while a 25-litre container of groundnut oil rose from ₦55,000 to ₦56,000 over the same period.

Yam recorded a more significant price reduction, with Efuru yam, which sold for between ₦6,000 and ₦6,500 in August, now selling for between ₦3,000 and ₦5,000, depending on size.

A yam trader attributed the decline to the arrival of new yam in the market, explaining that seasonal supply had helped to lower prices despite rising fuel costs.

“What affects yam price is season. The reason the price has come down now is that it is new yam,” he said.

“Despite fuel price being up, it does not really affect yam because we are in the season,” he added.

Similarly, Musa Ibrahim, a trader dealing in beans and grains, said prices had declined only marginally following the arrival of new harvests from Niger State.

“Beans were ₦85,000 per bag in August; now it is around ₦82,000 because a new harvest has entered from Niger State. But it is not cheap. This same bag was ₦35,000 before,” he said.

Consumers Yet To Feel Relief

The mixed price movements have left consumers struggling to achieve meaningful savings despite the easing inflation rate.

A bread distributor and shopper at Ile-Epo Market, Mrs Stella Omonye, said some food items had become cheaper while others had increased in price.

“Some food items like yam and rice have reduced, while some like garri, red oil and vegetable oil have increased,” she said.

Omonye, who spends about ₦150,000 monthly on food, said her expenditure had remained almost unchanged since August because increases in others offset price reductions in some commodities.

She added that she could still purchase roughly the same quantity of food with her usual budget but had yet to experience significant relief from the decline in the national inflation rate.

Unusual Decline In Monthly Food Prices

Meanwhile, CardinalStone Research said the sharp month-on-month decline in food prices reported by the NBS was unusual in recent years. However, similar movements were more common between 1996 and 2005, a period it associated with greater food security.

The research firm suggested that the decline might have been partly driven by reductions in market food prices and a possible easing of security concerns. It cited indications from FEWS NET Nigeria of improved access to farmland in previously affected communities.

However, the experiences of traders and consumers indicate that the benefits of seasonal harvests remain uneven across food categories, with higher fuel and transportation costs continuing to influence prices.

Experts maintain that sustained relief will require more than a decline in the inflation rate. Lower logistics costs, improved security in farming communities, better storage facilities and more efficient food supply chains are necessary to moderate prices and restore household purchasing power.

Until these structural challenges are addressed, Nigerians may continue to face high food prices despite further moderation in headline inflation.