With the ongoing US–Israel–Iran conflict triggering a surge in crude oil prices above $100 per barrel from $60, amid disruptions to energy infrastructure and heightened risks to global supply routes, including the Strait of Hormuz, countries are responding with a mix of short-term relief and longer-term structural adjustments to cushion the economic effect on their population. Countries like Indonesia have introduced massive fuel subsidies, there are tax cuts in Brazil, and strict price caps in Greece, South Korea, and Vietnam to stabilize domestic economies and minimize consumer impact. China is doubling down on renewables and electrification to reduce oil dependence. Governments are actively trying to reduce consumption to ease pressure and are capping pump prices or electricity tariffs, while some countries use stabilisation funds or regulators to delay the pass-through of global oil prices to consumers.
In Nigeria, where the surge in crude prices has equally shot up the price of petrol from about N800 per liter to about N1, 500 since February 28 when the war started, experts are calling for the removal of levies and charges on petroleum products, while Labour groups are already restless, demanding cost-of-living allowances and wage awards. Meanwhile, the options open to Nigeria appear limited as an expert ruled out the reintroduction of fuel subsidy in any form as it negates the ongoing reforms. Sunday Vanguard sought the views of some economists on the way to go by the Federal Government.
Support refinery with concessionary terms —Yusuf
CPPE CEO, Dr. Muda Yusuf, Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), said, “For Nigeria, the transmission channels are direct and profound. Rising global oil prices are already feeding into: Higher petrol and diesel prices; increased transportation and logistics costs and rising production costs across sectors. Others include renewed exchange rate pressures and escalating food prices driven by input and distribution costs”.
The former DG of the Lagos Chamber of Commerce & Industry (LCCI) said, “In the current context, urgent and coordinated policy measures are required to cushion the impact of rising energy prices and sustain the fragile disinflation gains.
“Priority should be accorded to strengthening domestic refining capacity through the provision of stable and reliable crude oil supply to local refineries, including the Dangote Refinery, under supportive, predictable and, where feasible, concessionary terms.
“This is crucial for moderating domestic fuel prices, easing pressure on foreign exchange demand and enhancing the country’s energy security.
“Governments at all levels should also scale up investment in efficient and affordable public transportation systems as a key social protection measure.
“Transport costs have become a major channel of inflation transmission, and easing this burden would provide immediate relief to households.
“In addition, fiscal barriers to renewable energy adoption should be removed. “Waivers on import duties and taxes on solar equipment, inverters and batteries would accelerate the transition to alternative energy sources and reduce dependence on expensive fossil-fuel-based self-generation. “Additionally, all maritime charges should be suspended to ease the escalating shipping cost amidst the sharp increase in marine insurance globally.
Electricity supply
“More fundamentally, there is an urgent need to improve electricity supply. “Reliable power remains the most effective long-term solution to Nigeria’s energy cost crisis. “Strengthening generation, transmission and distribution infrastructure, alongside support for decentralized energy solutions, would significantly reduce production costs and inflationary pressures.
“In the short term, flexible and remote work arrangements should also be encouraged where feasible, as a means of reducing commuting costs and mitigating the welfare impact of rising fuel prices.
“Monetary and fiscal authorities must remain cautious and disciplined. “The resurgence in monthly inflation and the emergence of external shocks suggest that premature policy easing would be risky.
“Oil revenue windfalls should be managed prudently, with emphasis on strengthening foreign exchange reserves and supporting productive sectors of the economy.
Inflation outlook
“The current geopolitical energy shock poses a significant risk to Nigeria’s inflation outlook, with the potential to reverse recent gains and deepen pressures on households and businesses.
“A proactive, coordinated and forward-looking policy response is therefore imperative to safeguard macroeconomic stability, protect citizens and support enterprise sustainability in an increasingly volatile global environment”.
No to fuel price caps – Dele Oye, Ex-NACCIMA President
Sharing his own perspective, a former President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture, NACCIMA, Hon Dele Oye, warned that any attempt to impose fuel price caps would reverse hard-won reforms and push the country back into a costly subsidy regime.
Oye, who chairs the Alliance for Economic Research and Ethics Ltd/GTE, said while global crude prices have climbed sharply since late February, Nigeria remains unable to fully benefit due to low production levels, existing contractual obligations, and operational inefficiencies.
Brent crude is currently trading between $102 and $114 per barrel, significantly above the Federal Government’s 2026 budget benchmark of $64.85. This creates a theoretical premium of up to $49 per barrel.
However, Oye noted that much of the projected windfall remains out of reach.
According to data cited from PwC Nigeria, the price surge could translate to a gross premium of about $55.5 million daily.
Yet, Nigeria’s production shortfall estimated at about 1.46 million barrels per day, against a budget target of 1.84 million barrels means substantial revenue losses.
He added that every 100,000 barrels per day deficit represents roughly $4.1 billion in lost annual earnings.
“Much of Nigeria’s crude is already tied to forward sales and refinery obligations, leaving limited volumes for immediate gains,” Oye said, recalling that a similar opportunity was missed during the Russia-Ukraine war when high oil prices failed to translate into meaningful fiscal gains.
The former NACCIMA President stressed that although projections suggest potential windfall revenues in excess of ¦ 28 trillion annually, actual inflows will be far lower after accounting for production constraints, costs, and contractual deductions.
Oye cautioned strongly against calls for fuel price caps, describing them as economically unviable under Nigeria’s current framework.
He argued that price controls would effectively reintroduce fuel subsidies, which the government scrapped in 2023 after years of fiscal strain.
“At current pump prices ranging from N1,200 to N 1,400 per litre, any artificial cap would create massive fiscal liabilities. The arithmetic of subsidies does not change with higher oil prices,” he said.
The economist also warned that rigid price controls could disrupt fuel supply chains, discourage importers, and encourage the growth of black markets.
Citing global research, he noted that such policies often lead to product shortages in developing economies during periods of price volatility.
Oye further pointed to the emergence of the Dangote Refinery as a key factor, explaining that forcing price caps could undermine its commercial viability or compel the government to resume costly compensation schemes.
Global comparisons
While some countries have adopted emergency measures to cushion the impact of rising energy costs, Oye said Nigeria’s fiscal position limits its options.
Countries like South Korea and Germany have implemented price controls, tax adjustments, and strategic reserve releases, backed by stronger fiscal buffers.
Others, including Indonesia, continue to sustain large-scale subsidies, though at significant cost.
In contrast, Oye said Nigeria must avoid policies that could deepen fiscal vulnerabilities.
Measures
To navigate the current crisis, Oye proposed a mix of immediate and medium-term measures aimed at strengthening resilience and capturing available gains.
He called for the introduction of naira-denominated crude sales to local refineries to ease foreign exchange pressure, alongside the release or establishment of strategic petroleum reserves to stabilize supply.
He also advocated an emergency fertiliser distribution programme ahead of the planting season, expansion of compressed natural gas infrastructure, and improved security around oil assets to boost production.
Central to his recommendations is the need to ring-fence excess oil revenues.
Oye urged the government to channel windfalls above the budget benchmark into the Nigeria Sovereign Investment Authority and the Excess Crude Account to prevent diversion into recurrent spending.
At the sub-national level, he advised state governments to focus on subsidising public transport systems rather than fuel consumption, while promoting cleaner alternatives such as liquefied petroleum gas for households.
Economic discipline
Oye concluded that Nigeria stands at a critical juncture, with the Iran-induced oil shock offering both opportunity and risk.
“The lesson from past oil booms is clear. Gains are often temporary, but the consequences of poor policy choices can linger,” he said.
He maintained that the country’s priority should be converting short-term price gains into long-term structural strength, rather than pursuing populist measures that could undermine fiscal stability.
Without any cushion people will suffer —Yahaya
Alhaji Ibrahim Yahaya, National Secretary, Petroleum Dealers Association of Nigeria (PDAN), for his part, said the Federal Government has declared no subsidy for the simple fact that we can’t afford it, now the global situation has made prices go up and there is no end in sight.
Yahaya, who is also the Chairman, Arewa Economic Forum asserted: “The prices will continue to go up despite mitigating measures by the International Energy Association and the partial ease of the situations in the Persian Gulf, but the main question is, will the FGN be able to afford the re- introduction of subsidy again?
“Can we fund it from any of the other accounts, not the Federation Account?
“These are the questions but undoubtedly without any cushion the people will suffer”..
No reason delaying palliative measures — Onyekpere
Eze Onyekpere, Lead Director, Centre for Social Justice, CSJ, also speaking, said, “Nigerians started paying more for fuel, including petrol, diesel, kerosene within three days of the start of the American, Israel, Iran war due to the fact that market prices have been deregulated and subsidies withdrawn.
“However, the benchmark price of Nigeria’s bonny light crude oil in the 2026 federal budget is $60 per barrel while oil currently sells at about $110 per barrel.
“Therefore, government is earning about $50 more per barrel of crude oil. If we meet a production of not less than 1.8million barrels a day, that will be an additional $90million per day.
“If government still exists for the security and welfare of the people, and not for the president, his cabinet, governors, federal and state legislators, top level civil servants and their cronies in the private sector; then, there is no reason delaying the government from rolling out some temporary palliative measures to ease the hardship on the people.
“FGN should consider increased crude oil allocation to functional local refineries at subsidized prices and the refined products channeled exclusively to the domestic market.
Strategic national reserve
“This is also the time to learn lessons and start preparing facilities and procuring refined products to build a strategic national reserve that could last for not less than one year.
“The refined products in the reserve would be released in emergencies and hardships of this nature to reduce price fluctuations.
“The possibility of temporary tax reduction for the poorest of the poor should be considered.
Similar tax incentives should be deployed for the productive sector, especially manufacturers to ensure that the cost of goods and services are within reach and still competitive.
“This hardship is felt more because of the decadent electric power sector run by a clueless minister who seems not to understand anything about the sector.
“If electricity had been available for most of the time, it could have reduced the dependence on petroleum fuel.
Sack
“The president, as part of the measures to reduce the hardship, needs to sack the minister of power immediately and replace him with a thorough-bred professional who understands the sector”.
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QUOTE 2: This hardship is felt more because of the decadent electric power sector run by a clueless minister who seems not to understand anything about the sector
By Dayo Johnson, Steve Oko, Olasunkanmi Akoni, James Ogunnaike, Rotimi Ojomoyela, Gabriel Ewepu, Emmanuel Iheaka, Chinedu Adonu, Matilda Ikediobi, Adeola Badru, Musa Ubandawaki, & Laolu Elijah
Nigeria is grappling with worsening economic hardship as the current blockade of the
Strait of Hormuz following the ongoing Middle East war has unleashed fresh pressure on already fragile living conditions.
The disruption of global oil supply has translated into immediate consequences for Nigerians, with rising costs deepening the burden on households and businesses.
Fuel has become increasingly costly across the country, forcing many citizens to buy at significantly higher prices.
Before the crisis began less than a month ago, petrol sold for between N830 and N900 per litre. Findings by Sunday Vanguard show that prices have since surged sharply, with petrol now selling for about N1,350 per litre in Lagos and up to N1,500 per litre in many parts of the country.
Survival
The hike has compounded existing challenges in the energy sector, where electricity supply remains low and unreliable.
Together, these factors have created a difficult environment in which daily survival is becoming more uncertain.
Across cities and villages, residents are experiencing longer hours of blackout while also struggling to access fuel to power generators.
For many, the combination of darkness and high fuel costs has disrupted both work and basic domestic routines.
Small businesses are among the hardest hit. Traders, artisans, and service providers who depend on petrol powered generators now face rising operating costs that eat directly into their profits.
In some cases, business owners have reduced working hours or shut down temporarily as they can no longer afford the cost of keeping their operations running.
Households
So alarming is the electricity situation that the Minister of Power, Adebayo Adelabu, a few days ago, apologised to Nigerians over the prolonged and severe outages recorded in recent weeks, acknowledging the strain the situation has placed on households and key sectors of the economy.
Speaking in Abuja, he admitted that the ongoing blackout has worsened living conditions, particularly during the intense dry-season heat.
“I want to apologise to Nigerians, officially now, coming from me as the Minister of Power, for this temporary issue that is leading to hardship being experienced, especially during this dry season, where there is so much heat everywhere”, Adelabu said.
“Businesses are being affected, schools have been affected, and industries have been affected. It is not our wish to find ourselves in this situation, but it is due to some factors that are actually beyond our control”.
The ripple effects are evident in the cost of transportation and essential goods. With fuel scarce and expensive, transport operators have increased fares, leading to higher prices of food and other commodities.
This has placed additional strain on already stretched household budgets, especially for low income earners.
Charcoal
Families are adjusting in difficult ways.
Many households now ration energy use carefully, limiting generator usage to only the most essential activities.
Others have turned to alternative sources such as charcoal and saw dust stove despite the health and environmental concerns associated with it.
Students and workers alike are feeling the strain. In areas with prolonged power outages, studying at night has become a challenge while productivity during the day is affected by the lack of reliable electricity.
The situation has also raised concerns in critical sectors such as healthcare where steady power supply is essential.
In response to the growing hardship, some state governments have begun to introduce measures aimed at easing the burden on citizens.
In Oyo State, Governor Seyi Makinde approved a N10,000 monthly transport allowance for all workers as a temporary relief measure.
The governor said the payment, which will begin in April, is intended to cushion the effects of rising fuel prices and ease the cost of commuting for workers.
He noted that the support will apply to all state and local government employees at a flat rate, initially for three months with a possibility of extension if conditions do not improve, adding that efforts would be made to ensure the intervention is as inclusive as possible.
Sunday Vanguard learnt that others may follow suit in coming days, as more citizens and business owners across the country brace for the continued impact of rising fuel prices and erratic electricity supply.
While such interventions provide some support, many Nigerians believe they fall short of addressing the scale of their crisis.
It is believed that broader reforms in the energy sector will improve electricity generation and reduce dependence on fuel driven alternatives.
Job losses
Already, there are growing concerns among organised private sector groups, including the Lagos Chamber of Commerce and Industry, LCCI, and the Nigerian Association of Chambers of Commerce Industry Mines and Agriculture, NACCIMA.
They warned that prolonged hardship could weaken economic activity across the country.
Small and medium enterprises which form the backbone of local economies are under severe pressure, raising fears of job losses and reduced income for many families.
Despite the challenges, Nigerians continue to adapt in order to cope with the difficult conditions.
However, the ongoing situation has heightened public anxiety about the future, with many calling for urgent and sustainable solutions to ease the energy crisis.
Global
Globally, countries are also struggling to manage the impact of the disruption linked to the Strait of Hormuz as energy markets remain volatile.
In the United States, authorities have released crude oil from strategic reserves and are considering temporary fuel tax relief to stabilise domestic prices.
In Germany and France, governments have introduced energy subsidies and capped electricity prices to shield households and industries from rising costs, while also accelerating investment in renewable energy sources such as wind and solar.
Meanwhile, in India and Japan, authorities have cut fuel taxes, increased subsidies, and intensified efforts to secure alternative crude supply routes.
These targeted interventions reflect a broader global attempt to cushion citizens from the far reaching effects of the crisis, even as uncertainty persists around the Strait of Hormuz.
Desperate measures
Sunday Vanguard spoke to Nigerians across the country to find out how tough things have become for them.
The findings reveal a population struggling to cope with skyrocketing fuel prices, erratic electricity supply, and the rising cost of basic goods.
Many respondents disclosed that they have adopted desperate measures to survive, including cutting back on meals, limiting generator usage to essential hours, relying on alternative energy sources such as solar, charcoal, and kerosene despite the health and environmental risks, avoiding unnecessary journeys and appointments, and reducing non-essential activities.
Others noted that some small businesses have temporarily closed or reduced operations, reflecting the severe impact of the crisis on daily livelihoods.
Ondo
Kunle Ajibogun, a trader, said: “It is alarming; people are dying. At first, we all believed in the Renewed Hope agenda of Mr. President but the way things are going, our hope is shifting to hopelessness. The cost of living is so high, electricity has gone beyond the reach of a common man. For me, I have decided to cut my expenses to zero. Government needs to be proactive and bring real stakeholders in the electricity sector to address the frequent collapse of the national power grid. A price control agency could also help moderate the cost of goods and services.”
Adagba Promise, for her part, said: “No doubt, high fuel prices have caused food prices and transport costs to skyrocket. Poor electricity supply has forced us to move steadily to solar. I carry charging gadgets everywhere, make friends with neighbors who have generators, and cut my coat according to my resources. The government should address the situation like Governor Makinde did with salaries.”
Damilola Isaiah lamented: “Petroleum price hikes have doubled my commuting cost while my salary remains the same. Poor electricity supply adds to the hardship. Those of us who depend on gadgets for work struggle because we can barely afford fuel for generators. We are suffering, and if nothing is done, we might reach our breaking point.”
Ekiti
Residents noted that the dual burden of high fuel costs and unreliable electricity has forced heavy reliance on petrol generators.
A cab driver, Oladeji Bayonle, said: “Petrol is now selling for N1,350 per litre. With no steady electricity, we depend on fuel for everything. It is too much to bear.”
Commercial motorcycle operator, Bidemi Ayankunle, noted: “I may have to work one day and rest the next. People can no longer afford transport, and we too cannot afford fuel.” A commuter, Odunayo Ibidun, added:”I used to spend N500 on transport daily; now it is over N1,000. Adding fuel for generators makes it overwhelming.”
Oyo
Adewale Johnson, a trader, said: “Running my business is extremely difficult due to frequent power outages. I have to rely on generators, which are expensive, and sometimes cannot operate at all.”
A teacher, Funke Oladipo, said: “Life is harder with constant outages; I often cancel online classes, and commuting is costly.”
Mr.Chukwudi Nwosu, a trader, said:”Electricity supply is unreliable. Rising fuel prices have reduced profits. I buy in smaller quantities to cope.”
Another businessman, Semilore Oshonubi, explained: “Sales have nosedived because power is unstable. Drinks spoil, and we cannot serve cold beverages.”
Lagos
Nelson Ekujuru, Coordinator of the Coalition for Good Governance, noted: “Nigerians are going through tough times due to astronomical energy costs. Epileptic power supply and high fuel prices are affecting every home and business. Governments must invest in alternative energy, including solar, and partner the private sector to make energy affordable.”
Debo Adeniran, President of CDHR and Chairman of CACOL, warned that persistent shortages and high costs undermine industrial productivity, widen inequality, and may increase crime and social instability.
Hassan Taiwo, known as Soweto, added: “This is unnecessary suffering. Nigeria is an oil-producing country. Any increase in oil prices on the world market should lead to economic buoyancy, not hardship. Privatization and handing the fate of Nigerians to private interests like Dangote has worsened electricity supply and fuel pricing. Nigerians need to protest, and labor movements should call for a general strike to demand reversal of fuel hikes and improved electricity supply.”
A resident of Lagos, Angel Awalite, told Sunday Vanguard: “It’s becoming really uncomfortable. As a business owner, I face higher operational costs, reduced productivity and decreased consumer spending due to the current inflation and fuel increase, which also makes me add to the price of my goods. This is placing a heavy financial burden on workers and ordinary citizens, affecting transportation, food and other essential services.
“Let us talk about the increase in food prices as well. Higher transportation costs are driving up food prices, making life more challenging for many Nigerians. This also brings us to heat and power generation. The fuel scarcity is also affecting power generation, with some areas experiencing frequent outages.
“Businesses and companies are facing higher operational costs, which may lead to reduced productivity and increased prices for goods and services. I just hope something is done as fast as possible.”
Also, Mrs Linda Ikediobi said: “The recent fuel price hike has hit my business hard. Customers from other states aren’t coming in like they used to because transportation costs are through the roof. Our suppliers have increased their prices, what was N2,000 is now N2,500, and buyers aren’t willing to budge. It’s a double whammy: our costs are up, but sales are down. Even getting to the market is a struggle with transport prices soaring. It is not just transport too, food, water, everything has gone up. Today was a write-off, with no sales to speak of.”
Charles James said: “Things are quite challenging right now. The inconsistent electricity supply means I have to rely more on fuel-powered alternatives, and with fuel prices rising, maintaining them is becoming more expensive. Coupled with the fact that I have to commute to different places daily, it definitely affects me. The rising fuel prices have also sharply increased the cost of goods. It’s definitely impacting my daily routines and comfort, but I’m doing the best I can to manage.”
Abia
Ndubuisi Odimba, 42, ICT Specialist, said: “We have been experiencing persistent electricity issues, and this has affected us in many areas, both at work and at home. It is becoming increasingly difficult to cope. The hike in fuel price has only made matters worse, and life is becoming unbearable. Some people have even shut down their businesses because they can no longer sustain the cost of operations. Government must urgently intervene and invest in solar farms at strategic locations to boost power supply.”
For his part, Mr. Chimdi Ejirika, a business centre operator, added: “I run a printing business in Umuahia. The recent fuel price increase has significantly affected my profit margin. Government needs to compel the Enugu Electricity Distribution Company to improve power supply during the day. Supplying electricity mainly at night is not helpful; we need at least eight hours of stable electricity. Electricity tariffs must also be reviewed downward.”
A metal fabricator, Okehie Obioma, noted: “It almost feels better to abandon reliance on public power supply entirely and return to the village. We are burdened by exorbitant electricity bills despite not enjoying steady power. Government must take urgent action to address this situation.”
A tailor, Mrs. Chioma Nwonvu, who is lives in Aba, decried the persistent lack of electricity, saying it is negatively affecting her business and livelihood.
Her words: “Due to the lack of electricity, I have been having problems with my customers. Those who gave me clothes to sew for occasions, I could not meet up because there was no light to complete the work.
“In fact, it got so bad that one of my good customers gave me a generator to use temporarily. But then, another problem is how to fuel the generator.
“It is a double problem for those of us who depend on both electricity and fuel to work.
“It is no longer easy to feed my family because work has slowed down significantly.
“We need urgent government intervention to fix the power supply and reduce the pump price.”
Abuja
A resident of the Federal Capital Territory, FCT, Abuja, Onuabuchi Uchenna, said: “ I’m affected because of the cost of transportation and we all know that electricity has been poor so I still rely on petrol to power the generator. Currently, all the bottle water companies in Abuja have increased their prices. If the price of petrol does not come down soon, the price of food will also increase too.”
Likewise, a public analyst, Chris Asuelim, said: “The ongoing war against Iran has been a mixed reaction for Nigeria. The nation is selling crude oil at a high price, which has increased earnings in dollars with the capacity to crash the dollar exchange rate. On the other hand, due to the pressure in the Middle East, the fuel pump price is flying to the ceiling. The effect is global.
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