Global commodity prices are expected to rise sharply in 2026, threatening to increase food and energy costs for Nigerian households even as higher crude oil prices offer the country an opportunity to boost government revenue.
The World Bank, in its Commodity Markets Outlook released on Wednesday, October 28, 2026, projected that overall commodity prices would rise by 23% this year before falling by 7% in 2027.
Energy prices are forecast to increase by 32% in 2026, while food commodity prices are expected to rise by about 10% this year and another 7% in 2027.
The Bank attributed the increases to the Middle East conflict, disruptions to grain shipments in the Black Sea region and the threat of severe El Niño weather conditions to agricultural production.
For Nigeria, the projections present competing risks. Higher oil prices could improve foreign exchange earnings and government revenue, but rising fuel, fertiliser and food costs could put renewed pressure on households, farmers and businesses.
The World Bank expects Brent crude to average $91 per barrel in 2026, compared with $69 in 2025, before declining to $79 in 2027.
Under an adverse scenario involving further escalation of the Middle East conflict and continued damage to Russian oil infrastructure, Brent could average $105 per barrel in 2027, while food commodity prices could rise 12% above the Bank’s baseline forecast.
Nigeria could benefit from higher international oil prices because crude oil remains a major source of government revenue and foreign exchange.
The country’s 2026 budget uses an oil price benchmark of $64.85 per barrel and a production assumption of 1.84 million barrels per day. The World Bank’s $91 baseline forecast for Brent is substantially above that benchmark.
However, the revenue benefit will depend on production volumes, export earnings, operating costs and the government’s share of petroleum receipts.
Data released by the Nigerian Upstream Petroleum Regulatory Commission on October 13 showed that Nigeria produced an average of 1.53 million barrels of crude oil per day in September, excluding condensates. Combined crude oil and condensate production averaged 1.717 million barrels per day, with single-day peak outputs touching near the 1.84 million-barrel target late in the month.
The figures show that Nigeria met its Organisation of the Petroleum Exporting Countries quota for the fifth consecutive month, although average crude oil production alone remained slightly below the federal budget’s 1.84 million-barrel daily assumption.
Higher prices therefore do not automatically guarantee that the government will realise its expected revenue.
The opportunity also comes with a fiscal risk. If the additional earnings are treated as permanent income and committed to recurring expenditure, a subsequent fall in oil prices could leave the government facing renewed financing pressures.
The more immediate concern for Nigerian households is the possibility that higher global energy and agricultural input costs will feed into domestic food prices.
The World Bank forecasts that food commodity prices will increase by a cumulative 18% across 2026 and 2027. It also expects fertiliser prices to rise by 14% in 2026 before returning to 2025 levels in 2027.
Higher fertiliser prices can increase farmers’ production costs, while more expensive fuel can raise the cost of operating farm machinery, processing food and transporting produce to markets.
These pressures could affect the prices of staple foods and reduce household purchasing power, particularly among low-income families that spend a large share of their income on food.
The impact on Nigeria will depend partly on domestic harvests, local fertiliser availability, transport costs, exchange-rate movements and the ability of farmers to access affordable inputs.
The World Bank warned that the combination of higher energy costs, disrupted trade and adverse weather could worsen inflation and food insecurity, particularly in vulnerable economies.
Its Deputy Chief Economist, Ayhan Kose, said the simultaneous shocks threatened inflation, food security and economic growth. He stressed the need to protect the poorest people and support low-income countries already struggling with heavy debt burdens.
Nigeria’s response will determine how much of the potential oil windfall translates into economic relief.
The government could use additional oil receipts to strengthen fiscal buffers, reduce borrowing pressures and support investments that improve agricultural productivity. Better access to fertiliser, storage facilities, irrigation and transport infrastructure could help reduce domestic food supply constraints.
Targeted support for vulnerable households may also offer more focused relief than broad subsidies, which can be expensive and difficult to sustain when international energy prices remain volatile.
The Central Bank of Nigeria also faces the challenge of containing inflation without imposing excessive pressure on businesses through high borrowing costs. At its September 21–22, 2026 meeting, the Monetary Policy Committee reduced the monetary policy rate to 23% from 26.5%, taking advantage of three consecutive months of easing domestic headline inflation to lower business borrowing costs while maintaining a tight stance against potential global supply shocks.
The World Bank said it had made between $50 billion and $60 billion available through existing financing instruments to help countries manage the fallout from higher commodity prices. The package includes $25 billion in pre-arranged financing and can support social safety nets, government fiscal capacity and liquidity for businesses and farms.
For Nigeria, the central challenge is to turn stronger oil prices into lasting economic benefits while limiting the impact of global food and energy shocks on households.
The opportunity to earn more from crude oil may be temporary, but the consequences of failing to protect purchasing power and strengthen domestic food production could persist long after commodity prices ease.
