Energy inflation falls to 4.37% as July power costs ease

Nigeria’s energy inflation rate fell sharply to 4.37 per cent in July 2026, its lowest level in four months, offering some relief to households and businesses after energy-related price pressures rose to 9.83 per cent in June.

Latest Consumer Price Index (CPI) data from the National Bureau of Statistics (NBS) showed that the July figure represented a 5.46 percentage-point decline from June and the lowest level since April, when energy inflation stood at 4.50 per cent.

Energy inflation has remained volatile in 2026. It rose from 11.20 per cent in January to 12.57 per cent in February, before falling 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 9.83 per cent in June before the sharp July moderation.

Despite the decline, energy costs remain a major concern for Nigerian households and businesses because changes in petrol, diesel and electricity prices feed directly into transportation, production and household expenses.

The latest Central Bank of Nigeria (CBN) survey showed that 60.9 per cent of businesses reported higher expenditure as a result of inflation in July, while 55.9 per cent of households recorded increased spending pressures.

Energy costs recorded the highest inflation-perception score among businesses at 74.1 points, while households recorded 61.9 points, indicating that energy remains one of the strongest factors shaping perceptions of rising living costs.

The figures suggest that the moderation in the official energy inflation rate has yet to translate into a complete easing of the financial burden faced by consumers and businesses.

The latest movement comes amid continued changes in Nigeria’s downstream petroleum market.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has proposed regulations that would prohibit petroleum companies from coordinating fuel prices, restricting supply or engaging in market-sharing arrangements that could undermine competition in the sector.

The proposed rules follow renewed concerns over possible coordinated pricing practices in the downstream petroleum market.

Meanwhile, Dangote Refinery reduced its ex-depot price of Premium Motor Spirit to N1,075 per litre on July 2, following a decline in international crude oil prices at the time.

However, international oil-market developments remain a major source of uncertainty for domestic energy costs.

Renewed tensions involving the United States and Iran have pushed crude prices higher, creating the possibility of renewed pressure on domestic petrol prices and other energy-related costs if the increase in global oil prices persists.

The July moderation in energy inflation therefore provides some relief but does not necessarily signal a sustained decline in household and business energy expenses.

For businesses, lower energy-price growth could reduce some operating-cost pressure, particularly for transport operators, manufacturers and other energy-intensive companies.

For households, however, the impact will depend on whether the lower inflation rate translates into slower increases in actual petrol, electricity and other energy bills.

The latest figure is therefore a positive development for Nigeria’s broader disinflation trend, but the sensitivity of domestic energy prices to global crude prices and downstream market conditions means the improvement remains vulnerable to renewed external and domestic shocks.