Tackle Rising Energy Costs To Sustain Inflation Rate Moderation, LCCI Warns

The Lagos Chamber of Commerce and Industry (LCCI) has stressed the need to address rising energy costs to maintain Nigeria’s recent progress in lowering inflation, despite the headline rate falling to 18.02 per cent in September 2025—the lowest in three years.

The LCCI attributed the decline to improved fiscal and monetary policy coordination, exchange rate stability, and stronger naira performance.

However, the Chamber noted emerging cost pressures, including higher energy and transportation costs, which may pose risks to the current disinflationary trend.

The director-general of LCCI, Dr. Chinyere Almona commended ongoing fiscal and monetary policy coordination that has contributed to this downward trend, now sustained for six consecutive months.
However, Almona warned that rising energy costs threaten to reverse this trend. “The recent pump price increase of Premium Motor Spirit (PMS) to about N1,000 per litre, combined with gas supply disruptions from labour unrest in the oil and gas sector, is driving up logistics costs and production expenses across industries,” she said.These energy-related shocks are pushing food prices higher through increased transport costs and inflating input costs in manufacturing and services. They risk intensifying inflationary pressures and undermining the current disinflationary trend if sustained.

The LCCI urged the government to actively engage with industry stakeholders and labour unions to sustain the gains to ensure stable power and fuel supplies.

Almona emphasised the importance of improving logistics efficiency, enhancing food value chains, and maintaining policy consistency to boost competitiveness and consolidate macroeconomic stability.

She explained that “the notable moderation in food inflation to 16.87 per cent, alongside improved exchange rate stability and stronger naira performance, demonstrates that recent policy adjustments and supply-side interventions are beginning to take hold.

“This development, driven by a combination of improved agricultural output, moderated energy prices, and policy discipline, offers relief to households and businesses. It provides a foundation for enhanced purchasing power, reduced production costs, and renewed investor optimism. The Chamber particularly acknowledges the Central Bank of Nigeria’s recent monetary policy easing and its impact in supporting liquidity and stimulating productive sectors.”

She insisted that “while this decline in inflation is commendable, the LCCI stresses the need to consolidate these gains through sustained structural and policy consistency.

“Efforts must continue to improve logistics efficiency, enhance domestic food value chains, and ensure stable power and fuel supply, all of which are essential for sustaining lower prices and boosting competitiveness.”

Almona noted “the recent increase in the pump price of Premium Motor Spirit (PMS) to about N1,000 per litre, coupled with gas supply disruptions caused by labour unrest by NUPENG and PENGASSAN, has led to a surge in domestic gas prices and inflicted a higher logistics cost burden on businesses. These developments are starting to push up energy and transportation costs, raise production expenses across industries, and ultimately be passed through to consumer prices.”

She pointed that “these energy-related shocks, if sustained, may intensify inflationary pressures in the coming period under review, particularly through higher logistics expenses, increased food prices due to more expensive haulage, and elevated input costs for the manufacturing and service sectors.

“The LCCI therefore calls for proactive government engagement with industry stakeholders and labour unions to ensure energy supply stability and avert prolonged disruptions that could undermine recent macroeconomic gains.”

LCCI DG urged policymakers to remain vigilant, given that inflation dynamics remain sensitive to global commodity prices, foreign exchange movements, and domestic fiscal conditions. Strong coordination between fiscal and monetary authorities remains vital in maintaining this positive trajectory.”

She added that “the LCCI views the September inflation outcome as a strong signal of macroeconomic recovery and renewed stability. The Chamber, however, urges the government to remain focused on the ongoing reforms, implement social investment programmes, and exercise much more caution with fiscal spending.”