Industrial Agony: 17 NGX Manufacturers Hit by ₦7.6tn Input Cost Surge

Nigeria’s manufacturing sector is facing a “double whammy” of escalating energy costs and shrinking consumer pockets as the U.S.-Israel-Iran conflict reshapes the global energy map.

The 17 largest manufacturers on the NGX collectively incurred ₦7.59 trillion in input costs as of December 2025—a 15.2% increase from the previous year, data gathered by MoneyCentral shows.

With the Strait of Hormuz (which carries 20% of global oil supply) under disruption, analysts warn that crude oil could hit $150 per barrel, potentially crippling factory operations that rely on diesel to bridge the gap left by an unreliable national grid.

The Energy Price Shock: Diesel at ₦1,700

The recent surge in global crude will trickle down to Nigerian factory floors with devastating speed. Because manufacturers cannot rely on the grid, they are directly exposed to the spike in “black gold” derivatives.

While rising oil prices are a boon for producers whose revenues will increase, it is however a double edged sword because it will stock global inflation as the price of gasoline/ diesel has spiked at the pump, causing pain to consumers and companies.

For instance in Nigeria, Depot prices of Automotive Gas Oil (diesel) have surged to as high as N1,700 per litre across major supply hubs after the Dangote Petroleum Refinery increased its ex-depot price to N1,500 per litre.

Sector Analysis: Cement and Brewing Under Pressure

The most energy-intensive industries are now forced to choose between absorbing losses or pricing out “impecunious” consumers.

The Cement Giants (₦1.1 Trillion Energy Bill)

• BUA Cement: Remains the most vulnerable, with energy accounting for 42% of its Cost of Goods Sold (COGS).

• Dangote Cement: Despite its ₦1.21 trillion cash flow, analysts at Chapel Hill Denham warn that energy volatility—historically 40% of production costs—remains the single biggest downside risk to its ₦1,102 target price.

• Lafarge Africa: Is accelerating its waste-to-energy and CNG truck initiatives to decouple its 59.4% gross margin from the $150 oil threat.

Nigerian Breweries (Price Hike Effective March 20)

To mitigate the “bedlam in the Middle East,” Nigerian Breweries has announced an upward review of its product prices effective Friday, March 20, 2026.

• Affected Brands: Star Lager, Gulder, Heineken, Legend Stout, and Maltina.

• The Rationale: “Prevailing economic conditions” and skyrocketing operational costs have made current pricing unsustainable for the brewer’s expansive SKU portfolio.

The $150 Oil Scenario: A Double-Edged Sword

While high oil prices are a boon for Nigeria’s $50 billion foreign reserves, they act as a tax on the domestic productive sector:

• Inflationary Spiral: As diesel hits ₦1,700, the cost of transporting everything from cement to beer will rise, potentially reversing the recent dip in headline inflation (15.06%).

• Imported Inflation: With Nigeria still importing some specialized additives and machinery, a $150 oil price will increase the landed cost of all industrial inputs.

• Consumer Backlash: With disposable income already stretched, further price hikes by manufacturers could lead to a significant volume contraction in the second half of 2026.

Get More of our proprietary news and analysis as MoneyCentral is now on WhatsApp Channels  Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!