Inflation drops to 32% despite petrol price hike — NBS

Nigeria’s headline inflation rate decreased to 32.15 per cent in August 2024 despite the recent hikes in the pump prices of petrol nationwide, the latest data from the National Bureau of Statistics showed.

This figure represents a 1.25 percentage points decrease from the 33.4 per cent recorded in July 2024 and the second consecutive monthly slowdown in inflation after a persistent rise in nearly two years.

The NBS in its Consumer Price Index report posted on its website on Monday, said the drop also signals a slower pace in the increase of the average price level compared to the previous month.

The report read, “In August 2024, the headline inflation rate further eased to 32.15 per cent relative to the July 2024 headline inflation rate of 33.40 per cent. Looking at the movement, the August 2024 headline inflation rate showed a decrease of 1.25 percentage points when compared to the July 2024 headline inflation rate.”

Inflation indicators measure the price changes of goods and services over 12 months. However, a decline in these indicators does not necessarily mean prices are dropping, but rather that the rate of price increase has slowed compared to previous months.

Nigerians had expected a hike in inflation rate given the recent increase in petrol price, a key pricing component for logistics that affects most commodities in the country.

On Monday, the Nigeria National Petroleum Company Limited announced that it would sell the petrol lifted from the Dangote Refinery at a price above N1,000 per litre in the far north.

This comes after several weeks of unending fuel queues nationwide.

It also explained that the price may go for as high as N1,019/litre in places like Borno State, and N999.22 in Abuja, Sokoto, Kano, and others.

However, the NBS stated that food, housing and clothing remained the major contributors followed by transport, furniture and education

On a year-on-year basis, the August 2024 inflation rate was 6.35 percentage points higher than the 25.80 per cent rate recorded in August 2023, indicating a significant increase over the past year.

Data comparing a month-on-month basis showed that the inflation rate in August 2024 stood at 2.22 per cent, slightly lower than July’s rate of 2.28 per cent, signaling a slower pace in the increase of the average price level compared to the previous month.

The NBS report added, “On a year-on-year basis, the headline inflation rate was 6.35 percentage points higher compared to the rate recorded in August 2023 (25.80 per cent). This shows that the headline inflation rate (year-on-year basis) increased in August 2024 when compared to the same month in the preceding year (i.e., August 2023).

“Furthermore, on a month-on-month basis, the headline inflation rate in August 2024 was 2.22 per cent which was 0.06 per cent lower than the rate recorded in August 2024 (2.28 per cent). This means that in August 2024, the rate of increase in the average price level is lower than the rate of increase in the average price level in July 2024.”

Continuing, the NBS stated that the average food inflation rate in August 2024 was 37.52 per cent on a year-on-year basis, which was 8.18 per cent points higher compared to the rate recorded in August 2023 (29.34 per cent).

The rise in food inflation on a year-on-year basis was caused by increases in prices of the following items, bread, maize grains, guinea corn, etc (bread and cereals class), yam, Irish potatoes, water yam, cassava tuber, etc (potatoes, yam and other tubers class), palm oil, vegetable, etc (oil and fats class) and ovaltine, milo, Lipton, etc (coffee, tea and cocoa class).

On a month-on-month basis, the food inflation rate in August 2024 was 2.37 per cent which shows a 0.10 per cent decrease compared to the rate recorded in July 2024 (2.47 per cent).

The fall was attributed to the decline in the rate of increase in the average prices of tobacco, tea, coco, coffee, groundnut oil, milk, yam, Irish potatoes, water yam, cassava tuber, palm oil, vegetable etc.

The average annual rate of food inflation for the 12 months ending August 2024 over the previous twelve-month average was 36.99 per cent, which was 11.98 percentage points increase from the average annual rate of change recorded in August 2023 (25.01 per cent).

Meanwhile, on state-by-state basis, all items inflation rate in August on a year-on-year basis was highest in Bauchi (46.46 per cent), Kebbi (37.51 per cent) and Jigawa (37.43 per cent), while Benue (25.13 per cent), Delta (26.86 per cent) and Imo (28.05 per cent) recorded the slowest rise in headline inflation on a year-on-year basis.