Nigeria’s largest listed companies spent nearly four times more on energy in the first half of 2026 than a year earlier, as rising fuel prices and unreliable grid electricity drive up operating costs and threaten profit margins.
Seven of the Nigerian Exchange’s top 30 listed companies that disclosed energy expenditure recorded combined spending of N12.72 billion in January to June, up from N3.32 billion in the same period of 2025, according to data compiled by BusinessDay from their financial reports.
The figures represent an increase of about 283 percent, highlighting how Nigeria’s electricity shortfall is feeding into corporate accounts and raising the cost of doing business across manufacturing, consumer goods, banking and energy.
The companies surveyed cut across manufacturing, consumer goods, banking and energy. They include Dangote Cement, BUA Foods, HBM Nigeria, UAC, First Holdings, Zenith Bank and Aradel Holdings.
The surge comes as businesses contend with an electricity system that struggles to deliver reliable power, forcing companies to rely on diesel generators, gas-fired plants and other alternative sources to keep operations running.
‘The rising energy burden underscores a deeper problem facing Nigeria’s private sector: companies are increasingly required to spend more simply to maintain existing levels of production and service delivery, rather than directing those resources towards expansion,’ Jovita Eiyike, an analyst covering the Nigerian consumer goods sector, said.
Eiyike added, ‘The resulting pressure could weaken earnings, constrain investment and make Nigerian businesses less competitive, particularly as manufacturers struggle to pass higher operating costs on to consumers already facing elevated living expenses.’
How energy costs increased for companies
Aradel Holdings posted the sharpest increase. Its spending on fuel and utilities climbed to N10.28 billion from N1.45 billion a year earlier, a rise of more than 600 percent.
BUA Foods’ energy bill rose 50 percent to N589.34 million from N392.71 million. UAC, another consumer-goods company, reported energy costs of N1.22 billion, up from N971.98 million.
Financial institutions recorded smaller increases in energy expenditure than manufacturers, but their reliance on uninterrupted electricity makes them particularly vulnerable to supply disruptions.
Zenith Bank’s energy spending rose 11 percent to N79.69 million from N71.72 million. First Holdings, the parent of First Bank of Nigeria, reported N22.45 million, up from N21.31 million.
Although the increases were more modest, banks face a different set of operational pressures. Banks’ extensive branch networks, automated teller machines, transaction infrastructure and data centres require continuous electricity to support financial services.
BusinessDay’s findings showed Nigeria’s electricity supply challenges have long forced businesses to invest in alternative power sources.
However, the cost of operating generators has increased as diesel and other fuels become more expensive, creating an additional burden for companies already facing elevated production costs.
The impact is particularly significant for food manufacturers, whose operations often depend on uninterrupted power to maintain production lines and preserve raw materials.
Luqman Agboola, head of research at Sofidam Capital, said the rise in energy expenditure could affect earnings if companies cannot pass the additional costs to consumers.
‘Energy costs are becoming a critical determinant of profitability,’ the analyst said.
Leye Kupoluyi, president of Lagos Chamber of Commerce and Industry (LCCI), Nigeria’s largest business think tank, said energy costs remain the most significant constraint, stating that sharp increases in petrol and diesel prices in 2026 raised costs of operating generators, transporting goods and distributing products, amid high electricity tariffs and logistics costs.
Kupoluyi said the high upfront costs of solar systems, battery storage, gas conversion equipment and energy-efficient machinery remained significant barriers to cleaner energy adoption among businesses.
He observed that unreliable electricity supply had forced many enterprises to depend on petrol and diesel generators, exposing them to fluctuating fuel prices, high maintenance costs and production disruptions.
According to him, improving energy affordability would require investment in gas gathering and processing facilities, transportation infrastructure, distribution networks and storage systems to connect Nigeria’s gas resources with the businesses that need reliable energy.
He also advocated targeted tax incentives, accelerated capital allowances and reduced import-related costs for qualifying clean energy equipment to encourage wider adoption.
The LCCI president stressed that expanding the national electricity grid alone would not immediately meet the energy needs of all SMEs.
Kupoluyi maintained that Nigeria’s energy transition should accommodate different technologies, including natural gas, solar power and battery storage, depending on their affordability and suitability for businesses.