Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has warned that the ongoing Middle East conflict could have a direct impact on Nigeria’s economy, particularly through higher inflation, transport costs and the prices of key commodities.

Speaking on Politics Today on Channels Television, Edun said the government is already implementing measures to cushion the possible effects of disruptions in global oil markets.

Edun said, “There will be a direct impact on the price of petroleum products, on the price of fertilisers and a few other things that will be impacted. Inflation will be impacted, transport costs will be impacted.”

According to the minister, rising transportation costs have a ripple effect across the economy, making it essential for the government to act quickly to reduce energy expenses.

He disclosed that President Bola Ahmed Tinubu had already approved an expansion of the compressed natural gas conversion programme to reduce reliance on petrol.

“One of the ways in which the President immediately announced was 100,000 extra CNG conversion kits to enable vehicles convert to CNG fuel, which is maybe 25 to 30 percent the cost of PMS.”

“That is the way you decisively move to bring down an important cost, because transport costs permeate so many other areas.”

Edun stressed that the government would avoid interfering directly with market pricing of petroleum products except in extreme circumstances.

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“We will be looking for measures that we can immediately implement other than interfering with an orderly market price. Given the policies and the philosophy of this government, intervention in pricing will always have to be a last resort.”

The minister noted that Nigeria is relatively better positioned than many countries because of its growing domestic refining capacity.

“Our demand is about 50 million litres per day and the refiners have said they can meet that demand. So we are in a relatively strong position if we can make that a reality on a consistent basis. We must say thank God for our refining capacity.”

He added that global energy supply disruptions, particularly around the Strait of Hormuz, remain unpredictable.

“We are not sure what will happen in places like the Strait of Hormuz or how much disruption there will be or how long supply chains will be affected.”

“But we do have the ability to produce domestically and we also have strategic reserves as required under the Petroleum Industry Act.”

The finance minister explained that while Nigeria may benefit from higher global oil prices through increased revenue, the gains could be offset by higher production and transportation costs.

“One we benefit from selling at a higher price, but then the costs are also higher. Freight costs and transportation costs also rise, so you have to see whether the gains are more than the losses.”

He also warned that global inflationary pressures triggered by the conflict could lead to higher interest rates worldwide.

“If inflation raises its head, the world will rise to fight it because it hurts the common man and the most vulnerable in society more than anybody else,” he said.

Edun said higher oil prices could strengthen government finances, enabling increased investment in agriculture, infrastructure and social sectors.

“Higher oil prices mean higher revenue for the federation, the federal government and the states. That puts government in a stronger position to support agriculture, infrastructure and the social sector in a way that makes life more affordable for Nigerians.”

While acknowledging that there are no guarantees against global economic shocks, the minister assured Nigerians that the government’s priority remains protecting recent gains in food prices and inflation.

“There are no guarantees,” Edun said. “But what we can guarantee is that protecting the current gains, lower food prices and lower inflation, is exactly what we are focused on.”

He added that the government would continue supporting domestic food production to ensure stable supply and affordable prices.

“Our intention is to keep food affordable, working with the farmers and ensuring a steady and adequate supply of food. We have achieved some progress to date and we will continue to take proactive steps to sustain it.” he said.

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