Industrial goods companies listed on the Nigerian Exchange Limited (NGX) spent a combined N820.7 billion on fuel and power in the first nine months of 2026, as rising energy costs continued to weigh on manufacturers’ operating expenses and profit margins.
The expenditure represents a 6.3 per cent increase from the N771.9 billion recorded by the companies in the corresponding period of 2025, according to figures from their unaudited financial statements for the nine months ended September 30, 2026.
The companies include Dangote Cement Plc, BUA Cement Plc, Beta Glass Plc, Berger Paints Nigeria Plc, Chemical and Allied Products (CAP) Plc, HBM Nigeria Plc and Austin LAZ and Co Plc.
The latest figures highlight the growing financial burden of energy on manufacturers, particularly businesses that depend heavily on diesel, gas and other alternative sources to sustain production amid unreliable grid electricity supply.
Dangote Cement accounted for the largest share of the expenditure, reporting N580.5 billion in fuel and power costs during the review period, representing a 2 per cent increase from N569 billion recorded in the corresponding period of 2025.
BUA Cement Plc recorded a sharper increase, with energy expenditure rising by 21.5 per cent to N216.6 billion from N178.2 billion in the previous year.
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Combined, the two cement manufacturers spent N797.1 billion on energy, up 6.7 per cent from N747.2 billion in the first nine months of 2025.
However, some companies recorded reductions in their energy expenses. Beta Glass Plc reported a 5.3 per cent decline to N23.2 billion from N24.5 billion, while CAP Plc reduced its energy costs by 20.4 per cent to N30.3 billion from N38 billion.
Austin LAZ and Co Plc recorded an increase in energy expenditure from N50,000 in the corresponding period of 2025 to approximately N10.9 million in 2026, representing a 22,046.9 per cent rise.
HBM Nigeria Plc, formerly Lafarge Africa, reported production variable costs of N226.3 billion but did not separately disclose its energy expenses.
Economists and industry analysts have warned that rising energy costs are increasing production expenses, squeezing profit margins and limiting manufacturers’ capacity to invest in business expansion.
Speaking in an interview, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said Nigeria’s power situation had deteriorated since February 2026.
He attributed part of the increase in energy expenditure to the Middle East conflict involving the United States and Iran, which he said had contributed to higher prices of diesel and gas.
According to him, energy-intensive businesses are particularly exposed because of their heavy reliance on these fuels to power factories and sustain production.
“Energy costs continue to be a major challenge for the industrial sector and even possibly for most of the sectors. The sectors that are most vulnerable are those who use more energy,” Yusuf said.
He lamented the slow pace of improvement in electricity generation and grid supply, noting that manufacturers have continued to rely on alternative power arrangements to keep their operations running.
Yusuf cited cement manufacturers as examples of businesses that have incorporated independent power generation into their operational models.
He noted that Dangote Cement had maintained a policy of providing dedicated electricity generation for its factories rather than depending entirely on public power supply.
Also speaking, investment strategist and Head of Research at GTI Securities Limited, Abiodun Ogunniyi, said rising energy expenditure increases production costs, reduces profit margins and weakens free cash flow.
He explained that the development could constrain manufacturers’ ability to invest in capacity expansion and other growth initiatives.
However, Ogunniyi cautioned that higher energy costs do not automatically translate into lower profitability, as companies could mitigate the impact through economies of scale, improved operational efficiency and adjustments to selling prices.
He added that manufacturers’ ability to transfer additional costs to consumers could be constrained by weak purchasing power, subdued construction activity and competitive pressures.
Ogunniyi further warned that increased reliance on captive power generation could affect electricity distribution companies (DisCos), as large industrial consumers account for a significant proportion of their high-value customers.
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According to him, the migration of major manufacturers from public electricity supply could weaken DisCos’ revenue base and reduce their capacity to invest in distribution infrastructure.
The rising energy burden is also reflected in the broader manufacturing sector.
A report by the Manufacturers Association of Nigeria (MAN) showed that manufacturers spent N1.34 trillion on alternative energy sources, including diesel, gas and other self-generation systems, in 2025.
The amount represented a 21 per cent increase from the N1.11 trillion recorded in 2024, reflecting the additional expenses businesses incurred to sustain production amid unreliable electricity supply.
Many manufacturers have increasingly relied on gas and low-pour fuel oil (LPFO) to power their factories, reducing their dependence on electricity distribution companies and limiting losses associated with blackouts and production disruptions.
Dangote Cement has at least 345 megawatts of captive power generation capacity across its four Nigerian plants, while BUA Cement operates an estimated 240MW to 280MW, mostly gas-fired.
Meanwhile, figures from the Nigerian Electricity Regulatory Commission (NERC) showed that the country’s 11 electricity distribution companies billed customers approximately N2.01 trillion between January and August 2026 and collected about N1.63 trillion, representing a collection rate of roughly 81 per cent.