By Olatunbosun Obafemi
The Centre for the Promotion of Private Enterprise (CPPE) has raised alarm over the potential economic fallout from the ongoing Israeli-Iran war, warning that the conflict could significantly drive up the cost of petroleum products in Nigeria and worsen inflationary pressures.
In a statement released by its Chief Executive Officer, Dr. Muda Yusuf, the Centre cautioned that the war could lead to a spike in prices of diesel, jet fuel, gas, and other energy products, with ripple effects across Nigeria’s economy.
“Energy cost is a major driver of inflation in Nigeria,” the statement read. “The war may affect production costs, logistics, transportation, and power generation expenses – leading to an inflationary scenario as businesses pass on additional costs to consumers.”
CPPE also highlighted the potential for imported inflation, noting that global energy prices have far-reaching effects on economies. It warned that monetary authorities in Nigeria and elsewhere may respond with tighter policies, triggering higher interest rates.
According to the Centre, elevated energy costs, inflation, and interest rates could dampen business profitability, particularly in the non-oil sector. Nigerian firms with supply chain ties or business interests in the Middle East were identified as especially vulnerable.
Despite these risks, CPPE noted a possible silver lining for Nigeria. The surge in crude oil prices – up by about 15 percent to $75 per barrel – could boost the country’s foreign exchange earnings, improve reserve levels, enhance forex liquidity, and stabilize the naira.
“While the crisis presents economic challenges, it also offers some fiscal benefits for oil-dependent economies like Nigeria,” Dr. Yusuf stated.
