Nigeria’s energy inflation drops to 4.37% in July

Nigeria recorded a sharp slowdown in energy-related price pressures in July, with energy inflation falling to 4.37 per cent, the lowest rate in four months, latest data from the National Bureau of Statistics show.

The July figure was 5.46 percentage points below the 9.83 per cent recorded in June, signalling a significant moderation in the pace of increase in energy costs.

Energy inflation has followed a volatile path since the beginning of the year. It rose from 11.20 per cent in January to 12.57 per cent in February before declining to 9.89 per cent in March and 4.50 per cent in April.

The rate increased again to 5.73 per cent in May and nearly doubled to 9.83 per cent in June before reversing sharply in July.

The latest decline brings energy inflation below the 10 per cent threshold in four of the first seven months of 2026.

However, the slower rate of increase does not necessarily mean that energy costs have become cheaper for consumers. Petrol, diesel and electricity prices remain important components of household spending and business operating costs.

Energy costs emerged as the biggest contributor to inflation perceptions among both groups.

• OPS questions impact of N15.8tn subsidy savings
• Dangote raises petrol price as crude tops $93
• PwC forecasts 4.2% economic growth in H2

The latest moderation in energy inflation comes against the backdrop of regulatory and pricing developments in Nigeria’s petroleum industry.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority is proposing new rules to prevent oil companies from engaging in coordinated fuel pricing, supply restrictions and market-sharing practices that could limit competition.

The move follows renewed allegations of coordinated pricing in the downstream market.

Meanwhile, domestic petrol prices have also been influenced by movements in global crude prices. Dangote Refinery cut its ex-depot petrol price to N1,075 per litre in July after international crude prices declined.

Global oil markets, however, remain vulnerable to geopolitical developments, with tensions involving the United States and Iran recently contributing to higher crude prices.

The decline in energy inflation could provide some relief to consumers and businesses, but energy remains a major driver of overall cost pressures in the Nigerian economy.

Changes in petrol, diesel and electricity prices can quickly feed into transport, manufacturing, logistics and household expenses, meaning energy costs will remain an important factor in the inflation outlook.