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The World Bank has issued a stark warning regarding Nigeria’s economic outlook, predicting that rising global oil prices could push the nation’s headline inflation up by approximately 3.1 percentage points.

This projected spike is largely attributed to the escalating conflict in the Middle East, which saw crude prices jump from below $70 in February to over $100 by mid-March 2026 following the closure of the Strait of Hormuz.

With February’s inflation already recorded at 15.06 percent, the Bank cautions that the increased costs of transportation and energy-related components—which make up over 10 percent of the Consumer Price Index – CPI basket—will severely strain the domestic economy.

The report highlights a direct pass-through effect where higher fuel and electricity prices inevitably drive up logistics costs across all sectors. According to the Nigeria Development Update, a sustained oil price of roughly $80 per barrel represents a 31.1 percent increase from pre-conflict expectations, creating immediate pressure on the downstream market.

Beyond these direct hits, the Bank notes that indirect channels will likely amplify the impact, as the increased cost of moving goods and services ripples through the supply chain, further eroding the purchasing power of Nigerian households.

A significant domestic factor compounding these pressures is the shifting landscape of Nigeria’s fuel supply. The World Bank pointed to the Dangote Refinery becoming the primary supplier of refined petrol after the cessation of import licenses in early 2026.

As of late March, the ex-depot price for Premium Motor Spirit – PMS rose to approximately N1,275 per liter, a figure roughly 12 percent higher than the estimated import-parity price. This price differential, combined with the lack of import competition, has led to a noticeable increase in petrol prices across the country, further fueling the inflationary fire.

In addition to energy and logistics, the global crisis is expected to hit Nigerian dinner tables through rising food and fertilizer costs. As international commodity prices climb, the cost of agricultural inputs and imported food items will feed directly into domestic inflation rates.

While the World Bank suggests that a potential appreciation of the Naira could serve as a buffer to mitigate some of these external shocks, the current trajectory suggests a challenging period ahead for the Nigerian economy as it grapples with both global volatility and internal market transitions.