By Eselemo Broderick, Abuja
With what it called “distortions in the downstream sector,” the price of imported refined petroleum products now stands 12 percent cheaper than products from Dangote Refinery, prompting the World Bank to warn midweek that the ongoing surge in global oil prices could directly increase Nigeria’s headline inflation by about 3.1 percentage points, as higher fuel costs ripple through the economy.
On March 23, 2026, Dangote Refinery raised the ex-depot price of Premium Motor Spirit (PMS) to ₦1,275 per litre compared to an import-parity price of ₦1,122 per litre. It was the ninth time the price of PMS has been adjusted in 2026 driven by global crude oil volatility, with six increases and three decreases.
The adjustments are tied to international market fluctuations, foreign exchange rates, and tensions in the Middle East.
The global financial institution linked the price surge to global crude oil increases, following the Middle East conflict, with oil trading around $80 per barrel, 31 percent higher than pre-conflict levels.
The World Bank has however warned that indirect effects on transport, logistics, and food prices could push inflation even higher, given that energy-related components account for over 10 percent of Nigeria’s Consumer Price Index basket.
While macroeconomic fundamentals have improved since reforms were introduced by the federal government in 2023, rising energy costs and shipping expenses are already filtering into domestic prices as Mathew Verghis Country Director for Nigeria acknowledged,.
He noted that petrol and diesel prices rose sharply in March. Invariably, reducing inflation remains central to improving living conditions, he stressed.
To Fiseha Haile, a Lead Economist, although Nigeria’s economy has shown resilience, inflation risks remain significant. He pointed to improvements in foreign reserves, exchange rate stability, and fiscal revenues, but cautioned against weaker capital inflows and tighter global financing conditions.
Sunday Southerner findings indicate that Petrol prices in Nigeria surged to as high as N1,400 per litre in some areas, up from roughly N875–N900 before the conflict. The resultant hike in fuel prices has directly increased transportation fares and logistics costs across the country as the cost of moving goods across Nigeria increased by over 50 percent, which in turn caused businesses to raise the price of goods.
Small and medium enterprises, which form the backbone of Nigeria’s economy, are heavily reliant on diesel and petrol for power generation due to epileptic and unreliable electricity supply. The increased energy costs have forced many businesses to raise prices or reduce production while those unable to cope with the challenges went under.
Nigeria had experienced a slight easing in the inflation rate to 15.06% in February 2026 from 33% in December 2024. However, the renewed pressure from the war between the US/Israel vs Iran threatens to reverse these hard-won gains, risking higher food prices and lower purchasing power for households.
