In the NBS selected food price watch for January, we see that 42 food items surveyed recorded y/y price increases. Food prices increased by 24% on average.

Despite significant credit interventions by the Central Bank of Nigeria to the agriculture sector, the sector's growth has been subpar due to well-known structural factors like insecurity, poor infrastructure, and low mechanisation.

Another major factor contributing to the soaring food prices is the pass-through effect of rising fuel prices on transportation costs.  

For core inflation, some of the key pressure points were from the prices of fuels. The Premium Motor Spirit (PMS) price watch shows that the average price paid by consumers increased by 25% m/m and 55% y/y to NGN257/litre.

The sharp m/m rise in petrol prices was unsurprising, given the product’s scarcity, which led to retailers selling at prices higher than the official rate of around NGN185/litre. In January, some petrol stations in Lagos sold at NGN250 per litre, while others sold for as high as NGN300/litre.  

The NBS report on  Automotive Gas Oil (diesel) price watch shows that the average retail price paid by consumers for diesel in January increased by 188% y/y to NGN829/litre. The surge in diesel prices continues to reflect the energy crisis experienced globally because of the Russia-Ukraine war.

Similarly, the Liquefied Petroleum Gas (LPG) price watch reveals that the average cost of refilling a 12.5kg cylinder increased by 39% y/y to NGN10,249. The continuous rise in LPG prices can be attributed to supply shortages of the product.

With respect to January’s National Household Kerosene price watch, the report shows that the average price paid by consumers for household kerosene also increased by 164% y/y to NGN1,153/litre.

The NBS transport fare watch shows y/y double-digit increases for all categories of transport fares. The increase in the average fare paid by commuters for bus journeys within cities rose by 37% y/y on average. One-way tickets for domestic airfares also increased by 95% y/y.

Given the sharp increases of inflation drivers in February, we expect the headline inflation rate to rise to 22.15% y/y.