Nigerian manufacturers are sounding the alarm as a “double whammy” of $100+ global oil prices and a domestic diesel surge to ₦1,700 per litre threatens to force a fresh wave of price hikes on everyday consumer goods.
The Nigerian manufacturing sector is bracing for an unprecedented cost shock as the 2026 Middle East conflict pushes operational expenses to a breaking point. Data from the 2025 financial year already showed a grueling 15.2% increase in input costs for the 17 largest companies listed on the Nigerian Exchange (NGX), totaling a staggering ₦7.59 trillion. However, analysts warn that the 2026 figures are set to dwarf these numbers. With the Strait of Hormuz—the transit point for 20% of global oil—facing disruptions, crude prices are flirting with $150 per barrel forecasts, causing an immediate domestic spike in Automotive Gas Oil (diesel) to ₦1,700 per litre at major supply hubs.
This surge is particularly lethal for Nigerian factories because of the “internalization of power costs.” Mr. George Onafowakan, Managing Director of Coleman Technical Industries Ltd, noted that “no factory in Nigeria is built without factoring in alternative power.” Because the national grid remains unreliable, manufacturers have effectively become their own electricity providers, using diesel-powered industrial generators to keep production lines moving. With energy now accounting for the lion’s share of production budgets, technical teams in industrial clusters like Agbara and Ikeja are working around the clock to optimize fuel consumption, yet many admit that passing these costs to the consumer is becoming unavoidable.
The broader economic impact is what experts call a “vicious cycle.” As manufacturers raise prices to survive the ₦1,700 diesel reality, consumer purchasing power—already weakened by 2025’s inflation—is expected to shrink further. This “double whammy” means that even as goods become more expensive to produce, there are fewer Nigerians able to buy them. Economists suggest that without targeted government intervention, such as energy subsidies for critical industrial clusters or a prioritized domestic crude allocation for local refineries, the manufacturing sector faces a “forced contraction” that could lead to significant job losses and a scarcity of locally made essential goods.
Cost Profile of 17 Major NGX-Listed Manufacturers (2024 vs 2025)
| Metric | FY 2024 | FY 2025 | % Change |
| Combined Input Costs | ₦6.59 Trillion | ₦7.59 Trillion | +15.2% |
| Average Diesel Price | ₦1,100 / Litre | ₦1,450 / Litre | +31.8% |
| Grid Power Reliability | 42% (Est.) | 38% (Est.) | -9.5% |
| Current Spot Price (March 2026) | — | ₦1,700 / Litre | Ongoing Spike |
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