Nigeria’s Inflation Relief at Risk as Global Energy Shocks Threaten Prices

Nigeria’s headline inflation dipped slightly to 15.06% year-on-year in February 2026, down from 15.10% in January, offering a glimmer of relief for policymakers and businesses. The Centre for the Promotion of Private Enterprise (CPPE) attributed the easing to base effects, ongoing monetary tightening, and relative macroeconomic stability. However, CPPE chief executive Muda Yusuf cautioned that these gains remain fragile and do not yet signal a decisive shift in price trends.

Despite the year-on-year moderation, inflationary pressures intensified on a monthly basis. National Bureau of Statistics data showed month-on-month inflation at 2.01%, with food prices surging 4.69%. This indicates that Nigerians are still facing rising living costs, particularly for essentials like food, transport, and energy. Yusuf stressed that disinflation means prices are rising more slowly, not that households are seeing real relief.

The CPPE highlighted that rising costs of energy, transport, and food are squeezing household budgets, especially in urban areas. Small and medium enterprises are also grappling with tighter profit margins due to elevated energy, logistics, and raw material costs. These pressures underscore how external economic shocks directly affect daily life and business operations in Nigeria.

Escalating geopolitical tensions in the Middle East, particularly involving Iran, Israel, and the US, have pushed crude oil prices above $100 per barrel. Yusuf warned that this could drive up petrol, diesel, and transport costs in Nigeria, creating ripple effects on food prices and the exchange rate. The country’s heavy reliance on fossil fuels for power generation further amplifies these vulnerabilities.

To safeguard inflation gains, the CPPE called for coordinated policy interventions. Recommendations include strengthening domestic refining capacity, improving electricity supply, and investing in efficient public transport. Fiscal reforms to support renewable energy adoption were also suggested. Yusuf emphasized that prudent management of oil revenues and cautious monetary policy are critical to prevent global shocks from reversing Nigeria’s modest inflation relief.

source: Business day