Energy Shocks Drive Inflation Rise in Nigeria to 15.38%

Analysts have identified energy shocks as a primary reason for the recent inflation hike in Nigeria, which has seen its headline inflation rate rise to 15.38% in March from 15.06% in February, according to the National Bureau of Statistics (NBS). This increase marks the first rise in inflation over the past 12 months, largely driven by elevated energy costs following the U.S.-Iran conflict.

The conflict has triggered a sharp increase in the prices of diesel, cooking gas, and kerosene, significantly raising transport and logistics costs across the economy. Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company (FDC), noted that the domestic diesel price surged by 88% to N1,870 per liter, while petrol prices rose by 45% to N1,270.

Analysts suggest that the ongoing U.S.-Iran war could further entrench inflationary pressures, leading to expectations that the Central Bank of Nigeria may hold its benchmark interest rate steady during its upcoming meeting in May.