African economies raise fuel prices as Middle East crisis drives oil higher

Nigeria, Egypt, Ethiopia, and Zimbabwe have raised domestic fuel prices as global oil costs surge and supply disruptions linked to escalating tensions in the Middle East push markets higher, threatening to reverse the disinflation trend emerging across several African economies.

The ongoing United States–Israel conflict with Iran, which began on February 28, has lifted global crude prices to $104.7 per barrel as of early Monday, heightening concerns over the stability of key energy supply routes. The crisis has disrupted tanker traffic through the Strait of Hormuz, which has remained closed — a narrow but critical waterway through which roughly one-fifth of the world’s oil supply passes.

For African countries heavily reliant on imported petroleum products, the surge in global prices is already feeding into higher domestic fuel costs, raising transportation and production expenses and potentially reigniting inflationary pressures that had begun to ease in recent months.

Nigeria, Africa’s most populous nation, has already seen a sharp rise in pump prices. Dangote Petroleum Refinery, the country’s largest private refinery, has revised its ex-depot prices for the fourth time since March 2, increasing the gantry price of Premium Motor Spirit (PMS), or petrol, to N1,175 per litre ($0.78), while Automotive Gas Oil (AGO), or diesel, has climbed to N1,620 per litre ($1.08).

Before the escalation in the Middle East, petrol sold between N840 and N900 per litre ($0.56–$0.60), highlighting the speed at which global developments are filtering into domestic markets.

The increases come at a delicate moment for the economy, where inflation had been gradually easing after more than a year of aggressive monetary tightening. Data from the National Bureau of Statistics show inflation slowed slightly to 15.10 percent in January 2026, from 15.15 percent in December, marking the tenth consecutive monthly decline.

Rising fuel costs, however, could stall that progress by pushing up transportation and food prices.

Egypt has also moved to adjust domestic energy prices. Last week, the government raised fuel prices by 14 percent to 17 percent, marking the first increase in 2026 and reversing earlier signals that prices could remain frozen for up to a year. The hike follows a previous adjustment of 10.5 percent to 12.9 percent in October 2025, part of Cairo’s broader strategy to gradually reduce fuel subsidies and align domestic prices with global markets.

The adjustment comes as inflationary pressures begin to re-emerge in the North African economy. Egypt’s urban consumer inflation rose for the first time in four months to 13.4 percent in February, the highest level since July, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS). The figure was up from 11.9 percent in January.

In East Africa, Ethiopia has also raised fuel prices as global oil costs climb. The government increased retail gasoline prices to 132.18 birr per litre ($2.32) and diesel to 139.64 birr per litre ($2.45), marking the sixth adjustment since last year.

Authorities say the increase reflects higher global oil prices and rising transportation costs linked to supply disruptions in the Middle East. The government has already spent about 100 billion birr ($1.75 billion) in subsidies to cushion consumers, but officials say gradual price adjustments are necessary to align domestic fuel prices with import costs.

Before the latest increase, inflation in Africa’s second most populous nation had continued to ease. Data from the Ethiopian Statistics Service show the annual inflation rate slowed slightly to 9.7 percent in February 2026, from 9.8 percent in January, maintaining single-digit levels first achieved in December — the first time since September 2018.

Zimbabwe has also adjusted its fuel prices. The Zimbabwe Energy Regulatory Authority (ZERA) raised petrol prices to $1.71 per litre, from $1.56, effective March 4, reflecting the rising cost of imported fuel.

Prior to the increase, inflation in the Southern African country had continued to moderate. Zimbabwe’s annual inflation slowed to 3.8 percent, the lowest level since September 2018, down from 4.1 percent the previous month.