A new surge in fuel prices, ocassioned by the Middle East crisis may be threatening, inflation and the attendant erosion of the purchasing power, one of the major gains of the economic reforms of president Bola Tinubu administration.
Analysts say, the price shock may test the credibility of the Central Bank of Nigeria (CBN)’s inflationary control credibility.
This is even as the nation awaits the February inflation figures from the National Bureau of Statistics, possibly by next week.
CBN had adduced declining inflation figures to the recent reduction in the bench mark interest rate, the Monetary Policy Rate, (MPR). But current developments, analysts, say, may be threatening the apex banks grip over the policy rate as well putting CBN’s single‑digit inflation pledge under immediate strain.
Dangote refinery, for instance, says crude‑price jump, ocassioned by the crisis in the Middle East forced the raise, while analysts note that every N50 fuel rise adds ∼0.6 % to headline CPI, putting the CBN’s monetary policy decisions less predictable.
They see the development as a paradox of, ‘from refinery gate to kitchen table as the inflation’s new fuel line.’
The development may have stoked fears of the country sliding back into a prolonged cost-of-living crisis.
Already, the increases in the price of petrol and diesel have pushed up transport fares, food prices and manufacturing costs in a nation where energy expenses remain a dominant driver of consumer inflation.
“Diesel‑run generators, higher haulage fees, and market‑women’s cost‑pass‑throughs mean the fuel shock isn’t sectoral. It re‑anchors inflation expectations, challenging CBN’s policy credibility,” analysts say.
Dangote Petroleum Company has increased the gantry price of Petroleum products many times, within a week and the other marketers as well as the Nigeria National Petroleum Company Limited and other marketers have followed suit.
On Monday, Dangote Petroleum Refinery raised its ex-depot price for petrol to about N1,175 per litre, while diesel climbed to around N1,620 per litre, marking the fourth price revision within a week and sending shockwaves through the downstream sector.
As ar today, petrol is being sold between N1300 and N1400 per litre, while transportation cost has moved up by between 30 and 50 percent.
Specifically, the analysts say the latest spike, triggered by a mix of global oil market tensions and domestic pricing adjustments, could reverse months of tentative stability in consumer prices and reinforce inflationary pressures that have weighed heavily on households since 2023.
The fortunes of the citizens started nosediving, following the sudden removal of the subsidy leading to the dismantling of decades of artificially low fuel prices, with the attendant inflationary pressures.
The analysts warn that the renewed price volatility, coupled with heightened insecirity that has prevented farmers from accessing their farmlands, could worsen the living conditions of the citizens.
They further argue that increases in petroleum products could worsen an already bad situation, further impoverishing the citizens.
Friday Ameh, Lagos based energy analyst called on the government to urgently intervene by taking a decisive action on the terrorists and bandits as indications show that they are gaining upper hand, while closer monitoring of the National oil company, NNPC Ltd should be intensified.
This is because, according to them, the company should be encouraged to provide Dangote with the crude to reduce the level of his imports, adding, “petrol remains essential for both transportation and household needs, while diesel is a critical energy source for industries and manufacturing operations across the country.”
According to Ameh, the bitter truth is that manufacturers and businesses often pass on the additional costs to consumers, which can result in a possible social unrest as there’s a limit to endurance.
The escalation in geopolitical tensions in the Middle East have pushed crude oil prices higher, raising import costs for refined petroleum products across Africa and increasing volatility in global supply chains.
For Nigeria, the biggest immediate economic risk lies in the inflationary consequences of rising energy prices.
The effects of a tight monetary policy by the Central Bank of Nigeria and a less volatile naira helped moderate inflation through 2025, contributing to an 11-month disinflation streak that began in April 2025.
However, Afrinvest warned that rising global energy prices could disrupt that progress.
