Nigeria’s fuel price hike fuels inflation fears amid Iran war and refinery challenges

Late last week the Dangote Refinery, Africa’s largest new refinery, raised its wholesale petrol price by 7%, triggering retail increases of up to 5% at stations in Lagos and Abuja and prompting expectations of steeper hikes in northern and rural areas. The Nigeria Labour Congress, representing four million workers, cautioned that higher fuel costs could erode wages and push household expenses higher as the school year begins, linking the pressure to the Iran war’s impact on global oil prices.

President Bola Tinubu’s 2023 removal of the long-standing fuel subsidy has already caused a five-fold price surge, turning fuel affordability into a central campaign theme for the upcoming January election. Inflation eased slightly to 15.39% in August, but analysts warn that sustained energy price rises could stall disinflation, with banks likely to keep rates steady amid volatility. While the Dangote plant claims to meet most of Nigeria’s 50 million-litre-per-day demand, about 40% of its crude still comes from imports, tying domestic fuel costs to global price swings.