Nigeria will cut import duties on food, vehicles and industrial inputs from July 1, as a fresh surge in fuel and diesel prices linked to disruptions from the Iran war raises concerns over renewed inflationary pressures.
The move comes as Africa’s most populous nation attempts to preserve a fragile disinflation trend which saw headline inflation drop to 15.06% in February from a peak of about 33% in December 2024.
Under the revised framework, announced on Monday, import duties on passenger vehicles will fall to 40%, bulk rice to 47.5%, and raw sugar cane to 55%–57.5%, down from 70%. Levies on palm oil will drop to 28.75%, while electric vehicles, mass-transit buses and manufacturing machinery will be fully exempt.
The presidency, via the President Bola Ahmed Tinubu Media Centre on X, said the measures are designed to reduce import-driven inflation across both consumer goods and production inputs, where elevated logistics costs and foreign exchange pressures have continued to feed price increases.
Wale Edun, Nigeria’s finance minister, said the government will also seek additional external financing at this week’s IMF–World Bank Spring Meetings, as global energy volatility complicates domestic stabilisation efforts.
Fuel prices surge
The tariff adjustment follows a sharp rise in domestic fuel costs after global oil markets were disrupted by escalating tensions linked to the Iran conflict.
Petrol prices have increased by more than 50% to about ₦1,330 per litre, while diesel has risen over 70% to around ₦1,550. The spike is feeding directly into transport fares, logistics costs and industrial production expenses.
Food inflation is particularly exposed, given Nigeria’s dependence on road transport and imported staples. Prices of rice, beans, yams and cereals have continued to rise, reinforced by seasonal supply constraints and persistent distribution bottlenecks.
“Escalating tensions in the Middle East are delivering structural shocks to the Nigerian economy on both the demand and supply sides,” Lagos-based Cordros Research said in a recent report, noting that energy and FX volatility are reversing earlier signs of moderation in price pressures.
Analysts warn of renewed price pressures
Analysts expect inflationary pressures to resurface in the near term, effectively ending an 11-month cooling cycle.
Cordros Research projects headline inflation rising to 15.4% year-on-year in March 2026, with monthly inflation accelerating to 4.2% from 3.5%, driven by fuel and exchange rate pressures.
Bismarck Rewane, chief executive of Financial Derivatives Company, warned that fuel pass-through effects remain significant for the broader price level. “Every one percent increase in the price of petrol will lead to a 0.079 percent increase in transportation costs and inflation,” he said while addressing economic authorities last month, adding that inflation could climb towards 19% by May if current trends persist.
FXTM’s Lukman Otunuga offered a more moderate outlook, projecting inflation could ease to 13.4% if disinflation pressures hold, potentially creating space for monetary easing later in the year.
As global oil shocks continue to filter into domestic prices, markets are now focused on Wednesday’s March inflation report for signals on the durability of Nigeria’s disinflation trend.
