The Nigeria Employers’ Consultative Association (NECA) has warned that rising global oil prices are translating into increased energy costs in Nigeria, with significant consequences for businesses and households.
The Director-General of NECA, Mr. Adewale-Smatt Oyerinde, in reaction to ongoing tensions in the Middle East and their impact on global oil markets, noted that the current trend is driving up domestic fuel prices and worsening inflationary pressures across the economy.
He stated that the situation reflects a growing paradox, where increases in crude oil prices are pushing up domestic energy costs, placing pressure on businesses and eroding the purchasing power of citizens.
According to him, “What we are witnessing is Nigeria’s oil paradox. Rising crude oil prices are pushing up domestic energy costs, squeezing businesses and worsening the cost of living for citizens.”
He noted that fuel prices have risen sharply in recent days, with petrol exceeding ₦1,300 per litre in some locations and diesel approaching ₦1,800 per litre, reflecting the impact of global oil price movements.
He stressed that energy costs sit at the heart of Nigeria’s economy, and energy is the engine of production and distribution.
“Once fuel prices rise, the effects are immediate and widespread: transport costs increase, food prices rise, and the overall cost of doing business escalates.”
Oyerinde stressed that businesses, particularly in manufacturing, agriculture, and logistics, are already under significant pressure.
“For many firms that rely on diesel for operations, current price levels are becoming increasingly difficult to sustain. Profit margins are shrinking, and businesses are being forced to either pass on costs or scale down operations.”
He further noted that global oil prices have surged amid geopolitical tensions, with Brent crude rising above $110 per barrel, intensifying cost pressures across energy markets.
He clarified that while the Middle East conflict has contributed to the rise in oil prices, the impact is exposing deeper structural weaknesses, underinvestment, weak infrastructure, and inefficiencies in Nigeria’s energy value chain.
“This situation is not only driven by external factors, it is also reflecting ongoing constraints within the energy value chain, including supply inefficiencies and infrastructure limitations.”
He warned that without urgent intervention, the situation could escalate. If this trend continues unchecked, we risk business closures, job losses, and a deeper cost-of-living crisis. Calling for immediate action, he urged the government to stabilise the downstream sector and support vulnerable industries.
“The government must act swiftly to ease supply constraints, stabilise prices, and provide targeted relief to critical sectors, he added.
On the long-term outlook, Oyerinde emphasised the need for structural reforms. Nigeria’s resilience will not be determined by oil prices, but by how effectively we manage them. This is a moment to strengthen institutions, improve transparency, and invest in sustainable energy solutions.
He concluded with a caution that if properly managed, this could strengthen our economy. If not, the gains from rising oil prices will be completely eroded by inflation and economic hardship.
