Group Warns Rising Oil Prices Putting Pressure on Nigerian Businesses, Households
- NECA has warned that rising global oil prices are increasing pressure on Nigeria’s economy
- Petrol and diesel prices have surged, worsening inflation and cost-of-living challenges
- Structural issues in Nigeria’s energy sector are amplifying the impact of global price increases
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The Nigeria Employers’ Consultative Association has expressed concern over the growing impact of rising global oil prices on Nigeria’s economy, warning that businesses and households are facing increased pressure as energy costs surge.
The development, largely linked to tensions in the Middle East, is pushing domestic fuel prices higher and worsening inflationary pressures across the country, Vanguard reported.
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“Oil paradox” raises concern
Speaking in Lagos, the Director-General of NECA, Adewale-Smatt Oyerinde, described the situation as Nigeria’s “oil paradox,” where higher crude oil prices are not translating into economic gains.
According to him, the trend is instead increasing production costs, reducing purchasing power, and putting businesses under strain.
“Rising crude oil prices are pushing up domestic energy costs, squeezing businesses and worsening the cost of living,” Oyerinde said.
Fuel price surge hits economy
NECA noted that petrol prices have risen sharply in recent days, with prices exceeding N1,300 per litre in some areas, while diesel is nearing N1,800 per litre.
Oyerinde explained that energy costs remain central to economic activities, stressing that increases in fuel prices have immediate ripple effects across sectors.
He said higher fuel costs typically lead to increased transportation fares, rising food prices, and a higher cost of doing business.
Businesses face mounting challenges
The association warned that sectors such as manufacturing, agriculture, and logistics are already under significant pressure as operating costs continue to climb.
Oyerinde noted that many firms relying on diesel are finding it increasingly difficult to sustain operations, with shrinking profit margins forcing businesses to either increase prices or scale down.
He cautioned that the situation could lead to business closures and job losses if left unaddressed.
Structural issues worsen impact
While attributing part of the crisis to global oil market disruptions, NECA said the situation also highlights longstanding challenges within Nigeria’s energy sector.
These include underinvestment, infrastructure gaps, and inefficiencies in the supply chain, which continue to amplify the impact of global price shocks on the domestic economy.
Source: Getty Images
Call for urgent reforms
Oyerinde urged the government to take immediate steps to stabilise the downstream sector and provide targeted support for vulnerable industries.
He also called for long-term reforms focused on strengthening institutions, improving transparency, and investing in sustainable energy solutions.
According to him, Nigeria’s economic resilience will depend on how effectively it manages its resources, warning that the benefits of rising oil prices could be eroded by inflation and broader economic hardship.
Petrol price hike looms in Nigeria
Legit.ng earlier reported that the rising cost of crude oil and escalating tensions between the United States and Iran are increasing the likelihood of further petrol price hikes in Nigeria.
Crude oil prices have reportedly risen above $100 amid escalating tensions in the Middle East region, which is critical to global oil supplies.
The Strait of Hormuz remains a critical chokepoint in global energy supply, with about one-fifth of the world’s traded oil passing through it daily.
Source: Legit.ng
