Energy inflation drops to 4.37% in July, lowest in four months

Nigeria’s energy inflation rate fell to 4.37% in July 2026, its lowest level in four months, according to the latest Consumer Price Index (CPI) data from the National Bureau of Statistics (NBS).

The latest figure represents a sharp decline from the 9.83% recorded in June, continuing the volatile movement in energy-related prices recorded in the first seven months of the year.

The data also show that energy inflation has remained below 10% in four of the first seven months of 2026, although price pressures remain a major concern for Nigerian households and businesses.

What the data is saying

NBS data shows that energy inflation stood at 11.20% in January 2026 before rising to 12.57% in February, according to the Consumer Price Index (CPI) figures.

• The rate subsequently declined to 9.89% in March and fell further to 4.50% in April, before rising again to 5.73% in May and 9.83% in June.
• However, energy inflation moderated sharply in July to 4.37%, representing a 5.46 percentage-point decline from the 9.83% recorded in June.
• The July figure was also the lowest energy inflation rate recorded since April, when the rate stood at 4.50%.

The July figure represents a 5.46 percentage-point decline from June and is the lowest energy inflation rate recorded since April, when it stood at 4.50%.

More Insights

Despite the decline in the official energy inflation rate, energy costs remain a major factor shaping how Nigerian households and businesses perceive inflation.

According to the latest CBN survey, Nigerian firms and households expect inflation-related spending pressures to ease over the next six months, although energy costs remain the biggest driver of inflation perceptions.

• The survey showed that 60.9% of firms reported an increase in expenditure due to inflation in July.
• The corresponding figure for households was 55.9%, according to the survey.
• Energy costs, including PMS, diesel and electricity, recorded the highest inflation perception score among firms at 74.1 points.
• Energy costs also ranked highest among households at 61.9 points.

The figures suggest that the moderation in energy inflation has not yet eliminated the broader impact of energy costs on household and business finances.

The movement in energy prices comes amid continuing changes in Nigeria’s downstream petroleum market.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has proposed new regulations that would prohibit petroleum companies from coordinating fuel prices, restricting supply or engaging in market-sharing arrangements that distort competition across the midstream and downstream oil and gas sector.

The proposed regulations come weeks after allegations of coordinated fuel pricing resurfaced in Nigeria’s downstream petroleum market.

Meanwhile, Dangote Refinery slashed the ex-depot price of Premium Motor Spirit (PMS) to N1,075 per litre on July 2, following a decline in global crude oil prices.

However, developments in the international oil market remain a source of uncertainty for domestic energy prices, particularly as renewed tensions involving the United States and Iran have pushed oil prices higher.

What you should know

The moderation in energy inflation comes as Nigerian households continue to face pressure from elevated living costs and borrowing rates.

Nairametrics previously reported that Nigerians are increasingly postponing major purchases, including cars, homes and household appliances, as higher living costs and elevated borrowing rates squeeze household finances.

The July energy inflation figure therefore provides some relief but does not necessarily mean that energy costs have become insignificant for households and businesses.

Energy prices remain closely linked to transportation, production and household expenditure, meaning movements in PMS, diesel and electricity costs can continue to influence broader inflation expectations.