The World Bank has cautioned that Nigeria could see its headline inflation rise by as much as 3.1 percentage points due to the ongoing surge in global oil prices, with higher fuel costs expected to ripple across the economy.
In its latest Nigeria Development Update released in Abuja, the Bank noted significant distortions in the downstream petroleum sector. Imported petrol is currently around 12 percent cheaper than fuel supplied by the Dangote Refinery. As of March 23, 2026, the refinery raised the ex-depot price of Premium Motor Spirit (PMS) to ₦1,275 per litre, compared with an import-parity price of ₦1,122 per litre.
The report linked the price increase to rising global crude oil costs following the Middle East conflict, with oil trading near $80 per barrel—31 percent higher than pre-conflict levels. The Bank warned that indirect effects on transport, logistics, and food prices could further elevate inflation, as energy-related components account for over 10 percent of Nigeria’s Consumer Price Index basket.
“While macroeconomic fundamentals have improved since the 2023 reforms, rising energy and shipping costs are already filtering into domestic prices,” said World Bank Country Director for Nigeria, Mathew Verghis. He noted that petrol and diesel prices increased sharply in March, stressing that reducing inflation remains central to improving living standards.
Lead Economist Fiseha Haile added that Nigeria’s economy has shown resilience, with improvements in reserves, exchange rate stability, and fiscal revenues. However, he cautioned that weaker capital inflows and tighter global financing conditions leave the country exposed to inflationary risks.
Finance Minister Wale Edun emphasized that Nigeria is better positioned to absorb external shocks due to prior reforms, including increased crude production at 1.4 million barrels per day and redirected revenues from NNPC deductions. He highlighted the need for private sector investment to complement government efforts in reducing poverty.
Central Bank Deputy Governor Muhammad Abdullahi described high inflation as “the biggest tax on the poor,” reaffirming that inflation management remains a top priority.
Beyond immediate economic concerns, stakeholders—including state officials and policy experts—stressed the importance of investing in early childhood development as a structural priority for long-term growth, warning that neglect could undermine Nigeria’s future prosperity.