How Middle East Crisis is Affecting Livelihoods In Nigeria, While Govt Gains

By Emmanuel Kwada

The escalating conflict in the Middle East, now deep into its fourth week with the Strait of Hormuz largely shut to shipping, has pushed global oil prices to around $112 per barrel for Brent crude.

This creates a stark contrast in Nigeria: the federal government stands to gain significantly from higher export revenues, while the poor and middle class face intensified daily hardships that erode their already fragile livelihoods.

Image shows the price of Brent crude oil has risen to $114 per barrel.

The federal government benefits directly from the surge in crude prices, which far exceed the roughly $65 per barrel benchmark used in the 2026 budget.

As Africa’s largest oil producer, Nigeria derives over 80% of its foreign exchange earnings and a substantial share of public revenue from crude exports.

The windfall boosts inflows into the Federation Account, leading to larger monthly allocations shared among federal, state, and local governments.

Foreign reserves have strengthened, recently climbing toward or beyond $49-50 billion in recent months (with net reserves improving markedly in late 2025), providing a buffer for the naira and helping stabilize external payments amid global turbulence.

This extra revenue offers fiscal breathing room for debt servicing, infrastructure projects, or even potential palliatives if channeled wisely.

Yet these national-level gains remain distant from ordinary citizens, especially the poor and middle class who feel the crisis most acutely through skyrocketing living costs.

The poor, who spend most of their limited income on food, transport, and basic energy, face the harshest squeeze.

Petrol pump prices have surged dramatically in March 2026, with Dangote Refinery repeatedly hiking gantry prices—most recently to ₦1,245 per litre—and retail outlets across the country dispensing between ₦1,130 and ₦1,350 per litre depending on location and marketer, with some areas seeing even higher figures.

Image showing the Strait of Hormuz, the only sea access route for ships transporting oil from the Persian Gulf to the open ocean blocked by Iran

Diesel costs have climbed similarly, often approaching or exceeding ₦1,500-3,000 in projections. These increases ripple outward immediately: transportation fares for commuters, okada riders, and haulage trucks rise sharply, making daily commutes and goods movement far more expensive.

Small traders, artisans, and market women see their thin profit margins vanish as transport eats into earnings, forcing many to reduce trips, cut operations, or close early.

For households reliant on generators due to persistent grid unreliability, the cost of running petrol or diesel-powered backup power has become prohibitive, leading to reduced business hours for micro-enterprises or darkened homes at night.

Manufacturing and service sectors pass on higher energy and logistics expenses, driving up the prices of everyday goods. Food costs compound the pain: fertilizer shipments delayed or disrupted through the Strait have pushed input prices up 30-40% in places, hitting smallholder farmers hard during key planting periods and threatening lower yields for staples like rice, maize, yam, and vegetables.

Urban markets already report dramatic jumps in prices for tomatoes, pepper, beans, and other essentials, reversing earlier moderation in food inflation (which rose sharply to 12.12% year-on-year in February 2026 after a brief dip).

Headline inflation hovers around 15%, but the “imported” energy shock threatens to push it higher again, eroding purchasing power for salaried workers, pensioners, and informal earners whose incomes fail to keep pace.

The poor, who spend most of their limited income on food, transport, and basic energy, face the harshest squeeze—skipping meals, borrowing to survive, selling assets, or pulling children from school to contribute income.

The middle class, once able to afford modest comforts like private schooling, healthcare, or small savings, now grapples with mounting bills that force belt-tightening, delayed payments, or dipping into reserves. Many feel trapped in a cycle where national oil wealth translates into personal deprivation rather than shared prosperity.

The way out lies in deliberate, urgent steps to shield citizens while building lasting resilience. In the short term, the government can deploy targeted relief such as expanded cash transfers to the most vulnerable households, temporary food vouchers or subsidized staples in high-pressure urban and rural areas, and measures to ease bulk food transport from farms to markets to curb logistics-driven price spikes.

Fertilizer shipments delayed or disrupted through the Strait have pushed input prices up.

Fast-tracking maximum output from Dangote Refinery and modular facilities, alongside strategic smoothing of pump prices without reverting to blanket subsidies, could help temper volatility.

Over the medium to longer term, accelerating the shift toward renewables—through heavy investment in solar mini-grids, home systems, and powered irrigation for farmers—would reduce dependence on imported or diesel-based energy.

Agricultural support, including subsidized key inputs and improved rural roads, can lower production and distribution costs permanently.

True diversification away from oil dominance, by growing manufacturing, tech, agriculture exports, and non-oil sectors, remains essential to insulate the economy from distant geopolitical shocks.

Removing barriers like import duties on solar equipment and incentivizing energy-efficient practices across businesses and homes would accelerate progress.

As the U.S. 48-hour ultimatum deadline approaches and the risk of further escalation looms, Nigeria’s leaders have a narrow window to convert oil revenue gains into meaningful protection for citizens.

Without swift, pro-poor action and structural reforms, the crisis will deepen inequality, prolong hardship for millions, and undermine the very stability that higher revenues aim to secure.

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