The Lagos Chamber of Commerce and Industry has said Nigeria could witness a reduction in fuel prices in the coming days following the end of hostilities between the United States and Iran and the possible reopening of the Strait of Hormuz, even as inflation continues to squeeze businesses and consumers across the country.
- +LCCI forecasts lower inflation, fuel prices after ceasefire
The chamber, however, cautioned that any relief from lower fuel costs may not immediately translate into a more favourable business environment, as manufacturers, micro, small and medium enterprises, traders and households continue to grapple with high operating costs.
The chamber, however, cautioned that any relief from lower fuel costs may not immediately translate into a more favourable business environment, as manufacturers, micro, small and medium enterprises, traders and households continue to grapple with high operating costs.
President of the Lagos Chamber of Commerce and Industry, Leye Kupoluyi, said inflation remained a major burden despite government efforts to contain price increases.
His comments came after the National Bureau of Statistics reported that headline inflation rose to 15.93 per cent in May 2026 from 15.69 per cent in April, marking the third consecutive monthly increase. Food inflation stood at 16.96 per cent year-on-year, while the Consumer Price Index rose to 140.7 in May from 138.3 in April.
Speaking in an interview with The PUNCH, Kupoluyi said the reality facing businesses extended beyond the official inflation figures: “I observed that while the numbers tell one story, the business environment tells another. Inflation continues to weigh heavily on manufacturers, MSMEs, traders, and consumers due to rising costs for food, transportation, energy, and logistics. Government intervention has helped prevent a surge, but containment is not comfort.”
According to the LCCI president, businesses continue to struggle with weak consumer demand and shrinking profitability despite improvements in some macroeconomic indicators.
“The gap between nominal and real GDP growth confirms that prices are still eroding household income, and businesses are feeling that directly, in weaker footfall, compressed margins, and cautious consumer spending. Despite inflation dropping sharply from year-ago levels, many Nigerians are yet to feel meaningful relief due to weak purchasing power and elevated business costs,” Kupoluyi stated.
He added that the Central Bank of Nigeria’s Monetary Policy Rate of 26.5 per cent continued to constrain access to affordable credit for businesses and consumers.
“With the MPR still elevated at 26.5 per cent, borrowing costs remain high, limiting credit growth, business expansion, and consumer demand. Simultaneously, the power sector contracted 15.30 per cent in Q1 2026, meaning businesses are spending more to generate their own electricity, and that cost is being passed through to already price-sensitive consumers,” Kupoluyi said.
The LCCI president described the business climate in May as one focused on survival rather than growth.
“The business environment in May was one of cautious survival, not confident growth. The reforms are working at the macro level, but until energy costs fall, credit becomes accessible, and food supply chains are secured, the private sector will remain in a holding pattern, resilient but not yet thriving,” he said.
Kupoluyi expressed optimism that recent developments in the Middle East could bring some respite through lower energy prices.
“With the good news about the end of the US-Iran war and the possible opening of the Strait of Hormuz, we could see a drop in fuel prices soon. But without sustained relief from the high cost of doing business, we may still experience a tense business environment in the short term,” Kupoluyi added.
The PUNCH had reported that oil prices continued to decline after the United States and Iran reached a ceasefire agreement aimed at ending hostilities and reopening the Strait of Hormuz, a key global oil shipping route.
Brent crude reportedly fell from $87 per barrel on Sunday to $83 per barrel on Monday following the announcement of the peace agreement, raising expectations that petrol prices in Nigeria could drop to around N900 per litre if tensions continue to ease.
Other organised private sector groups also attributed the recent inflation increase to geopolitical tensions in the Middle East, rising energy costs, insecurity and import bottlenecks.
Deputy President of the National Association of Small-Scale Industrialists, Segun Kuti-George, linked the inflationary trend to disruptions in global oil trade caused by the conflict.
“Inflation has certainly been on an upward trend extensively because of the war in Iran. Coupled with the closure of the Hormuz Strait by Iran and the blockade by the U.S., which has negatively impacted 20 per cent of petroleum-produced trade,” Kuti-George said.
He noted that households and manufacturers had borne the brunt of higher energy costs.
“The impact has been huge. It has affected not only the households, but the manufacturers,” Kuti-George stated.
Kuti-George added that while petrol prices had fallen slightly in some locations, cooking gas remained beyond the reach of many Nigerians.
“You have a kg of gas selling for N2,000 to N2,500 in a lot of places. Where it is a little bit less than that, the queue that you will find there is frustrating,” he said.
He expressed hope that the easing of tensions in the Middle East would reduce pressure on petroleum markets and ultimately help moderate inflation.
