The World Bank has said fuel prices in Nigeria have risen by more than 50 percent since the outbreak of the Iran conflict, intensifying inflationary pressures and raising concerns over household welfare.
Speaking at the Nigeria Development Update (NDU) presentation in Abuja, the World Bank’s Lead Economist for Nigeria, Fiseha Haile, noted that while economic activity remains resilient, the surge in energy costs is feeding into broader price increases.
“Overall business activity has been expanding over the past few months, suggesting the impact on growth has been relatively contained.
But the shock is still being felt through higher inflation,” Haile said. 
According to the Bank, the sharp rise in fuel prices has significantly increased transportation, food, and production costs across the economy, adding that diesel costs have nearly doubled.

Although inflation eased to 15.06 percent in February from about 33 percent in December 2024, it remains elevated compared to regional peers and has come under renewed pressure following the Middle East crisis. 
Haile warned that persistent inflation poses a major risk to incomes and poverty reduction, urging authorities to consider lifting restrictions on fuel imports to help ease supply constraints and moderate prices. 
Despite these headwinds, Nigeria’s economy is expected to grow, with business activity still in expansion territory and external buffers improving as foreign exchange reserves rise. However, tighter global financial conditions continue to threaten inflows, borrowing costs, and remittances. 
The World Bank projects growth of about 4.2 percent in 2026 and advised policymakers to maintain tight monetary policy, save oil windfalls, and avoid blanket subsidies to curb inflation. 
Meanwhile, the World Bank Country Director for Nigeria, Mathew Verghis, stressed that inflation remains the most immediate threat to household welfare, noting that reducing price pressures is key to restoring purchasing power.
Verghis identified energy sector reform as the most urgent priority for unlocking growth, warning that gains in off-grid solar will fall short without fixing the country’s on-grid electricity system.
”Without that, Nigeria’s ambition of building a $1 trillion economy could remain out of reach,” Verghis stressed.
He also pointed to the need for stronger fiscal governance and deeper coordination across Nigeria’s decentralised system, with state governments expected to play a larger role in delivering critical infrastructure.
