Fuel, Transport Costs Drive Selling Price Inflation To 4-Month High

Higher fuel and transportation costs pushed selling price inflation among Nigerian private-sector firms to a four-month high in October 2026, as businesses continued to grapple with rising operating expenses despite sustained economic growth.

The latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI), released yesterday, showed that firms increased their selling prices at the fastest pace in four months, with more than 29 per cent of respondents raising their charges during the month.

The report attributed the increase to higher fuel, transportation, and other input costs, which continued to feed into production costs across the private sector.

Although business conditions remained firmly in expansion territory, the headline PMI declined to 55.7 in October from 56.4 in September, indicating a slower pace of improvement in operating conditions at the start of the fourth quarter.

The expansion was supported by increases in output and new orders for the ninth consecutive month, reflecting sustained customer demand and continued growth in business activity.

Head of Equity Research, West Africa, at Stanbic IBTC Bank, Muyiwa Oni, said output prices maintained their upward trend as persistent increases in fuel and transportation costs raised production expenses.

“Panellists also indicated that prices of building materials and food produce increased during the month. Staff costs also increased modestly during the month, linked to the need to encourage employees to take on more work as well as help them deal with higher living costs,” Oni said.

According to the report, manufacturing recorded the fastest pace of selling price inflation, narrowly ahead of the wholesale and retail sector, as businesses passed higher operating costs on to customers.

While purchase price inflation quickened to a four-month high, the overall rate of input price inflation increased at a slightly slower pace, supported by a moderation in staff cost inflation.

The report noted that firms continued to experience higher costs for fuel, building materials and food products, while the increase in staff expenses remained modest.

Where staff costs rose, respondents attributed the increases to salary adjustments aimed at helping employees cope with higher living costs and encouraging them to complete projects more quickly.

The report added that firms continued to expand purchasing activity for the 23rd consecutive month to meet strong customer demand and prepare for future workloads.

Stocks of purchases also accumulated sharply, although at a slower pace than in September, while suppliers’ delivery times shortened for the fourth consecutive month.

The improvement in delivery times was linked to prompt payments, smoother traffic conditions and suppliers’ willingness to respond more quickly to requests.

Despite the increase in new orders, businesses reported operating at full capacity and reducing outstanding business for the third consecutive month, with the rate of depletion reaching its highest level since January

Employment growth, however, slowed to its weakest pace in three months, although firms continued to create jobs, extending the current period of employment growth that began in June 2025.

Looking ahead, businesses remained optimistic about the outlook for the next 12 months, supported by expectations of continued improvements in customer demand, planned advertising and increased investment.

The report stated that 46 per cent of respondents expressed optimism about future business conditions, although sentiment eased slightly from September.

The latest survey suggests that while Nigerian businesses continue to benefit from stronger demand and expanding activity, rising fuel and transportation costs remain a major source of pressure, forcing firms to increase selling prices even as overall business growth moderates.