Oil Price Rally Could Push Nigeria Inflation Higher by 3.1 Points — World Bank

The World Bank has warned that the recent surge in global crude oil prices could increase Nigeria’s inflation rate by around 3.1 percentage points, driven by rising fuel and energy costs across sectors.

This was contained in the Bank’s latest Nigeria Development Update, presented in Abuja, where it also highlighted pricing imbalances in the downstream petroleum sector. According to the report, imported petrol currently sells at a lower rate than fuel from the Dangote Refinery by about 12 percent. On March 23, 2026, the refinery adjusted its ex-depot PMS price to ₦1,275 per litre, compared to an import-parity benchmark of ₦1,122 per litre.

The World Bank linked the increase in fuel prices to rising global crude oil costs triggered by geopolitical tensions in the Middle East, with crude trading near $80 per barrel—about 31 percent above pre-conflict levels. It warned that secondary effects on transportation, logistics, and food prices could further intensify inflation, noting that energy components make up more than 10 percent of Nigeria’s CPI basket.

Country Director for Nigeria, Mathew Verghis, said macroeconomic reforms since 2023 have improved fundamentals, but rising energy and shipping costs are already feeding into domestic inflation. He noted recent increases in petrol and diesel prices and emphasized the importance of reducing inflation to improve living conditions.

According to Lead Economist Fiseha Haile, Nigeria’s economy remains resilient but vulnerable to inflationary pressures. While acknowledging improvements in reserves, exchange rate stability, and fiscal revenues, he cautioned about declining capital inflows and tighter global financing conditions.

Finance Minister Wale Edun argued that Nigeria is in a stronger position to withstand external shocks due to reforms, pointing to crude oil production of 1.4 million barrels per day and enhanced government revenues from reduced NNPC deductions. He added that private investment is essential for poverty reduction.

Central Bank Deputy Governor Muhammad Abdullahi reiterated that controlling inflation remains critical, describing it as “the biggest tax on the poor.”

Beyond economic indicators, experts and government stakeholders also emphasized early childhood development as a key structural priority, warning that neglecting it could negatively affect Nigeria’s long-term economic growth and development.

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