Soaring energy costs: CPPE seeks FG’s intervention to ease burden, unreliable electricity imposes annual economic losses of ₦10trn—CPPE

Centre for Promotion of Private Enterprises CPPE, has asked for government’s urgent intervention to ease the burden of energy cost.

In a statement the Executive Director, CPPE, Dr Muda Yusuf, said that the continued pressure on Nigerians and the economy by the United States-Israel Iran war demands that government come up policies to cushion the effect without further delay.

Muda said that the February 2026 CPI report presented a cautiously optimistic picture, with headline inflation easing marginally to 15.06% year-on-year, down from 15.10% in January and significantly lower than 26.27% a year earlier. 

However, he said this cannot be sustained, because “the improvement is fragile and does not yet signal a decisive turnaround in price dynamics.

He added that the underlying inflation reality remains concerning. On a month-on-month basis, inflation accelerated to 2.01%, while food inflation surged to 4.69%, reversing the moderation recorded previously.

He said “Structural vulnerabilities amplify the impact; Nigeria’s exposure to energy-driven inflation is intensified by structural weaknesses in the domestic economy.

“The heavy reliance on petrol and diesel for power generation, due to unreliable electricity supply, creates a strong and immediate pass-through from global oil prices to domestic inflation.

“Estimates indicate that unreliable electricity imposes annual economic losses of between ₦7 trillion and ₦10 trillion, while spending on generators exceeds ₦3.7 trillion annually.

“This structural dependence means that energy price shocks quickly translate into higher production costs, transport costs and general price levels across the economy.

“Policy imperatives: protecting households and businesses; In the current context, urgent and coordinated policy measures are required to cushion the impact of rising energy prices and sustain the fragile disinflation gains.

“Priority should be accorded to strengthening domestic refining capacity through the provision of stable and reliable crude oil supply to local refineries, including the Dangote refinery, under supportive, predictable and, where feasible, concessionary terms.

“This is crucial for moderating domestic fuel prices, easing pressure on foreign exchange demand and enhancing the country’s energy security.

“Governments at all levels should also scale up investment in efficient and affordable public transportation systems as a key social protection measure. 

“Transport costs have become a major channel of inflation transmission, and easing this burden would provide immediate relief to households.

“In addition, fiscal barriers to renewable energy adoption should be removed. Waivers on import duties and taxes on solar equipment, inverters and batteries would accelerate the transition to alternative energy sources and reduce dependence on expensive fossil-fuel-based self-generation. 

“Additionally, all maritime charges should be suspended to ease the escalating shipping cost amidst the sharp increase in marine insurance globally.

“More fundamentally, there is an urgent need to improve electricity supply. Reliable power remains the most effective long-term solution to Nigeria’s energy cost crisis. 

“Strengthening generation, transmission and distribution infrastructure, alongside support for decentralized energy solutions, would significantly reduce production costs and inflationary pressures.

In the short term, flexible and remote work arrangements should also be encouraged where feasible, as a means of reducing commuting costs and mitigating the welfare impact of rising fuel prices.

“Monetary and fiscal authorities must remain cautious and disciplined. The resurgence in monthly inflation and the emergence of external shocks suggest that premature policy easing would be risky. Oil revenue windfalls should be managed prudently, with emphasis on strengthening foreign exchange reserves and supporting productive sectors of the economy.”