Economic experts are forecasting a significant rise in the prices of consumer goods throughout 2026, as the ongoing conflict between the United States, Israel, and Iran continues to escalate.
The conflict has already pushed global oil prices above $100 per barrel, with the resulting increase in fuel costs impacting both local manufacturers and consumers in Nigeria.
The war, which began in February 2026 after US and Israeli forces launched strikes on Iran due to failed nuclear talks, was initially expected to last just a few weeks.
However, more than a month later, the situation shows no signs of resolution, heightening fears about long-term economic effects, particularly on the cost of living.
What they are saying
The rise in global crude prices has led to an increase in petrol prices in Nigeria, with the cost of a litre jumping from less than N900 to over N1,350.
Experts warn that the inflationary effects of the war are expected to persist for much of 2026, worsening the already fragile financial situation for many Nigerians.
Dele Oye, former President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), highlighted that the war’s impact is already being felt in the form of higher diesel prices, which have driven up the cost of manufacturing.
- “Once diesel prices go up, it affects the cost of manufacturing, which in turn gets passed on to consumers at higher prices,” Oye explained.
He added that, with approximately 139 million Nigerians living in poverty, the crisis will likely push even more people into poverty.
Victoria Akai, CEO of Duchess Group, noted that the escalating cost of fuel has dramatically affected production costs for local businesses.
She explained that her factory, which produces sweet potato flour and other products, has seen transport costs rise sharply.
- “The cost of transportation has gone up, sometimes doubling or even tripling compared to previous prices,” she said.
- “it has not been easy getting products from the farm gate because it looks as if the production staff themselves are finding it difficult going to the farms every day to harvest, package and send to us.
- “These rising costs are ultimately passed on to consumers, leading to higher prices for goods like sweet potato flour, which now costs up to N78,000 per carton, compared to N48,000 before the crisis.”
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, emphasized that higher fuel prices are directly affecting food distribution and manufacturing, leading to inflationary pressure.
- “Rising fuel prices are causing transportation costs to soar, and the costs of goods like food are being pushed up as well,” he said. “In turn, this is worsening the cost-of-living crisis for Nigerians.”
Get up to speed
Small and medium-sized enterprises (SMEs) across Nigeria are also feeling the heat, with many reporting rising operating costs and eroding profit margins.
A survey in Abuja highlighted that traders are adjusting prices upward in response to the surging costs of transportation and production. For instance, the price of food staples such as tomatoes and onions has skyrocketed.
At the Orange Market along the Abuja-Keffi road, a basket of tomatoes, which previously cost between N9,000 and N10,000, is now being sold for up to N35,000.
Similarly, the price of a large bag of onions has surged from N15,000 to N45,000.
For consumers, the pressure is mounting, with many struggling to afford basic food items and services.
- Charles, a Lagos resident, told Nairametrics, “I’ve gone into debt just trying to feed my family. Prices of food have gone up so much, and my income can’t keep up.”
Another Lagos resident, Seun Johnson, pleaded for help to alleviate the pressure on the masses.
- “Government should try and help us. Prices of yam, rice, vegetables, virtually everything has skyrocketed over a war that does not concern us. We are in Nigeria and suffering from a war that is going on in a country far away from us.”
More insights
While experts warn that inflation may continue in the short term, they believe that stability may eventually return as the situation in the Middle East resolves.
However, some, like Dele Oye, caution that the energy market’s recovery may take time, and consumers may continue to face higher prices for the foreseeable future.
For Victoria Akai, fuel subsidy may not be the best solution, but she thinks there must be a way to cushion this effect for businesses.
- “So my recommendation would be that we need to look at the best practices. What are other countries doing to cushion the hike in food prices for their businesses? I think that the government should look at ways of cutting down the prices of transportation, subsidizing it.”
She said that while cutting transportation costs is good for the short term, the government must collaborate with stakeholders and find a long-term solution.
- “And then of course, I think this is also a good time for us to look at upscaling and the opportunities for EVs. Because this energy situation is really becoming a reality, and governments have to look at how they can control it. We are all hinged.”
What you should know
Meanwhile, the Nigerian government has stated its commitment to market-based pricing for petrol, despite the rising costs.
Finance Minister Wale Edun emphasized that the administration’s economic strategy includes market-driven pricing for both petroleum products and foreign exchange, and that efforts would focus on easing the cost-of-living pressures in other ways rather than reversing the reforms already in place.
The broader outlook remains cautious, as the Middle East crisis continues to exacerbate global energy prices, and Nigerian consumers face the brunt of these increases.
