Economy

Pressured By Fuel Price Hike, Nigeria’s October Inflation Rate Gallops To 14.23%

Nigeria’s inflation rate for the month of October soared by 14.23%, up by 0.52% year-on-year in the month of October from 13.71% in the prior month, pressured by the hike in the price of premium motor spirit (petrol) by the government.

The rate could have been faster, but for the decision to shelve the equally planned increase in the cost of electricity by as much of 100%.

The increase in cost of petrol per litre impacted on cost of transport and services, with direct consequence for food which is moved from the hinterland to city centres across the country, made worse by the combination of a continued closure of land borders by the Federal Government, and the activities of herders and rustlers that have driven farmers from their farms.

Urban inflation rate increased by 14.81% (year-on-year) in the period under review, from 14.31% recorded in September 2020, while the rural inflation rate increased by 13.68% in October 2020, as against 13.14% in the previous month.

In the period under review, the composite food index stood at 17.38%, compared to 16.66% in September 2020, pushed by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, vegetable, alcoholic and food beverages and Oils and Fats.

The ”All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 11.14% in October 2020, up by 0.56% when compared with 10.58% recorded in September 2020.

The highest increases recorded in prices of passenger transport by air, Hospital and medical services, passenger transport by road, pharmaceutical products, motor cars, vehicle spare parts, maintenance and repair of personal transport equipment, hairdressing salons and personal grooming establishments, miscellaneous services relating to the dwelling, paramedical services and shoes and other footwear.”

Across the states, all items inflation was highest within the period under review in Sokoto at 2.91%; followed by Edo, 2.53%; and Akwa Ibom, 2.52%; and slowest in Jigawa, 0.37%; Taraba, 0.60%; and Oyo, 0.69%.

“In analysing price movements under this section, note that the CPI is weighted by consumption expenditure patterns which differ across states. Accordingly, the weight assigned to a particular food or non-food item may differ from state to state making interstate comparisons of consumption basket inadvisable and potentially misleading,” the NBS stressed.

Food inflation across the states during the month of October was highest year-on-year in Edo at 21.65%; Zamfara, 20.88%; and Kogi, 20.58%; while Ondo with 14.23% recorded the slowest rise; ahead of Ogun and Lagos with 14.47% and Lagos, 14.57%; respectively.

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