Business
Businesses suffocating as fuel energy costs shoot skywards
Major companies in Nigeria spent about N635.2 billion on power generation and utilization in 2023 amidst rising energy costs and its attendant impact on businesses.
This represents a 41.5 per cent Year-on-Year (YoY) increase compared to N448.76 billion spent in the corresponding period in 2022
Details of the cost show that the bulk of the expenditure was on diesel and related cost of independent power generation.
Latest statistics from the National Bureau of Statistics (NBS) showed that the average retail price of Automotive Gas Oil (Diesel) paid by consumers in December 2023 was N1,126.69 per litre in December 2023, an increase of 37.76 percent from N817.86 per litre in December 2022.
On a month-on-month basis, this increased by 6.74 percent from N1,055.57 per litre in November 2022.
Also, the average retail price of Premium Motor Spirit (Petrol) rose by 225.85 per cent to N671.86 within the same period from N206.19 per litre in December 2022, following the removal of fuel subsidy by President Bola Tinubu, which triggered major energy crisis in the country. Likewise, comparing the average price value with the previous month (November 2023), the average retail price increased by 3.53 percent from N 648.93.
Among the companies reporting sharp rises in power costs are BUA Foods Plc, BUA Cement Plc, Dangote Cement Plc, Fidson Healthcare Plc, Chemical and Allied Products (CAP) Plc, Neimeth Pharmaceuticals Plc, Aluminium Extrusion Industries Plc, Juli Plc, Lafarge Cement Africa Plc, Dangote Sugar Refinery Plc, NASCON Allied Industries Plc and Livestock Feeds Plc, all in the manufacturing sector.
Others are Wema Bank Plc, Fidelity Bank Plc, Cornerstone Insurance, Transcorp Plc, Transcorp Hotels Plc, NPF Microfinance Bank Plc and Abbey Mortgage Bank Plc from the services sector.
Meanwhile, industrialists and financial experts have said that the persistent hike in the prices of petroleum products as well as poor public power supply nationwide, among other factors, have pushed up cost of production and is adversely impacting business competitiveness and sustainability.
They observed that many small businesses have closed shop as a result of this development.
They suggested decentralization of the grid as well as amendment of the Power Reform Act to remove encumbrances that deter investors from the power sector.
Increase in energy cost for companies
Financial Vanguard findings from the companies’ financial statements showed that manufacturing firms suffer the most in energy cost. The breakdown shows that while the non-manufacturers recorded 26.4 per cent rise in energy cost, manufacturers recorded 41.8 per cent rise.
Amongst the manufacturers, Livestock Feeds recorded the highest increase in energy cost at 104 per cent followed by BUA Foods Plc with 50 per cent increase, and Dangote Cement rose by 49.8 per cent.
Commenting on the cost of operations, Graham Hefer, Managing Director, Okomu Oil Palm Plc, said: “The high energy cost can be crippling for all of us. The margin you mentioned, that is, the 30 per cent increase could be more. In most cases, If you have been running a generator set, you will be running your activities up to 80 per cent on self-generated power.
“We started the year at a little above N800 per litre for diesel, but, today, the price went up to more than N1,000 per litre. So, you can see the major cost increase; it impacts hugely on our cost of sales.
”If you run your power generator daily at N300 per kilowatt hour, if you are lucky, when at the beginning of the year you budgeted about N160 per kilowatt per hour, you can imagine the implication for all of us.”
He, however, said that while increases in energy cost, especially diesel and PMS have had an inflationary effect on the company (Okomu Oil) because the tractors, lorries and generating sets need the fuel, “we have managed to buffer ourselves partially by installing a 5MW turbine in our oil mill that uses palm biomass through the boilers to generate steam to run the turbine at a fraction of the cost of fuel.”
BUA Foods Plc in its 2023 earnings release noted that the surge in energy cost resulted in increases in cost of sales, selling and distribution expenses as well as total operating cost. According to the company, “67 per cent increase in cost of sales in 2023 to N477.14 billion was driven by an increase in raw materials cost and energy cost.
“Selling and distribution expenses increased by 98 per cent to N28 billion in full year 2023 from N14.1 billion in 2022 due to huge increase in cost of diesel within the period. ‘Total operating expenses increased by 20% to N39.7 billion in 12 months 2023 (12M 2022: N32.9 billion) on the back of increase in selling and distribution cost along the supply chain to customers.”
Speaking in the same vein, Lolu Alade-Akinyemi, CEO of Lafarge Africa, noted that the company’s performance in 2023 was largely impacted by spiraling inflation and unprecedented Naira devaluation, with attendant pressure on energy and supply chain costs.
Erodes profitability, impedes competitiveness — Stakeholders
Speaking on the operating environment of businesses, Mr. Muda Yusuf, CEO, Centre for the Promotion of Private Enterprise (CPPE) said that the power supply situation is worrisome as it affects companies’ profitability, competitiveness, sustainability and their ability to reinvest and create new jobs.
He, however, said there’s need for companies to be more innovative to ensure energy efficiency to reduce cost.
He stated: “The high and increasing energy cost is perhaps the second biggest problem facing companies across all sectors, especially in the real sector, next only to forex.
“This is essentially a legacy problem following years of sub-optimal performance of the public electricity sector. Most companies generate their own electricity at very exorbitant cost.
Cost of diesel has been soaring. Cost of gas is benchmarked against the dollar. It is really a very difficult situation.
“Yet, these additional costs are difficult to pass on to the consumers. It is a major predicament. At the macro level, there is need to accelerate reforms to boost investment in the power sector.
The high energy cost, according to him, has shot up costs significantly for firms from two perspectives.
“One is the cost of production because we are talking about costs that have practically doubled, if not more. The cost of production has gone up significantly and some small businesses have had to shut down operations because it has become difficult to pass on the cost to the consumers. Consumers purchasing power is already very weak; so, there’s a limit to which these additional costs could be passed to the consumers.
“So for smaller businesses, some of them could no longer continue, but for bigger businesses, the impact on their earnings is quite clear. So, it is eroding their profit margin; it is making their products more expensive; it’s affecting shareholders’ value, it also affects competitiveness. For some companies, it also affects their capacity to create more jobs or even retain existing ones.
“It is also contributing to the issue of competitiveness because all these issues of smuggling are a reflection of the fact that the domestic cost of production is extremely high. So, it makes locally-produced goods more expensive and that creates incentive for smuggling.
“The transportation cost is another thing. When these companies produce, they need to distribute the products around the country. You don’t have the road network to do that. All the trucks they are using are powered by diesel. So, their distribution cost has also gone up because of the cost of diesel. So, it is a major issue and that is what is reflected in their results. It reflects in dividends, profits and the ability to reinvest.”
The immediate President of the Manufacturers Association of Nigeria (MAN) Engr. Mansur Ahmed, said the numbers are not surprising given the increase in the diesel and petrol prices coupled with constant collapse of the national grid, which affects power generation and distribution across the country.
He called for the resolution of the complexities in the implementation of the Eligible Customer Initiative in the power sector to allow manufacturers take advantage of the stranded electricity.
He stated that full implementation of the initiative will allow more companies key into the initiative, thereby reducing their over dependence on petrol and diesel for power generation and thereby, driving down energy cost for the company.
Muda Yusuf of CPPE said that the grid should be decentralized, saying the country is too big to rely on a single grid. “We should have as many grids as possible across the states. The grid should be decentralized and each jurisdiction encouraged to generate power and feed to their local grid. You can use gas; you can use other forms of energy depending on what is available in your location. We should also ensure that tariffs are cost reflective because if tariffs are not cost reflective, investors will not put their money,” he said.
He called on government to put the right policies in place to attract investors to the space.
“The policy regime has to be right also. There’s the need to review the Power Reform Act. The Act has some rigid provisions which confer some privileges and monopoly on the DisCos, making it difficult for people to generate their own power. So, all these things need to be revisited,” Yusuf stressed.
The Dangote Group has announced that its Dangote Petroleum Refinery will begin supplying petrol (PMS) directly to 11 states starting Monday, September 15, 2025. This information was shared in a press release on the Group’s official X account on Thursday.
The retail pump prices for petrol in the initial states will be set at N841 per litre for Lagos, Ogun, Oyo, Ondo, Osun, and Ekiti. For Abuja, Delta, Rivers, Edo, and Kwara, the price will be N851 per litre.
Additionally, the gantry price for petrol is established at N820 per litre.
“Dangote Petroleum Refinery begins direct supply of PMS with free delivery effective Monday September 15, 2025
“New Gantry Price is set at N820,” the statement read in part.
To support petrol station operators, the refinery will provide free delivery of PMS to registered stations in the 12 states, with plans to gradually expand distribution nationwide. All station owners are invited to register to access these benefits. The move is expected to improve petrol distribution and supply consistency across the covered states.
Dangote Petroleum Refinery, Africa’s largest with a 650,000 barrels-per-day capacity, opened in 2024 to reduce Nigeria’s reliance on imported petrol and strengthen energy security.
In July 2025, it received 4,000 CNG trucks under a N720 billion investment programme, aimed at distributing 65 million litres of refined petroleum products daily, creating over 15,000 jobs, and saving Nigerians more than N1.7 trillion annually in energy costs. The initiative also seeks to improve efficiency in the downstream sector and revive dormant petrol stations.
The refinery’s planned expansion into nationwide petrol distribution was initially scheduled for August 15, 2025, but is now set to begin on Monday, September 15, 2025. Preparatory challenges in early September included a three-day notice from the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), starting Tuesday, September 9, to suspend lifting and dispensing of petrol over concerns about fair competition.
Simultaneously, the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) went on a two-day strike, which was later suspended following a DSS-convened meeting attended by the Minister of Finance, Wale Edun, and representatives of the Nigeria Labour Congress (NLC).
A Memorandum of Understanding (MoU) was signed to resolve the dispute, mandating unionisation of willing employees from 9th to 22nd September 2025, prohibiting the creation of any other union, and ensuring no worker would be victimised due to the strike.
Signatories included Sayyu Dantata (Dangote Group), O.K. Ukoha (NMDPRA), Ojimba Jibrin (Dangote Group), Benson Upah (NLC), N.A. Toro (TUC), NUPENG President Akporeha Williams, General Secretary Afolabi Olawale, and Amos Falonipe representing the Federal Ministry of Labour.
Wema Bank has successfully surpassed the Central Bank of Nigeria’s (CBN) capital requirement for commercial banks with national authorization, a significant milestone achieved through the completion of a substantial N150 billion rights issue.
This important financial strategy positions the bank firmly ahead of the upcoming deadline of March 2026, as outlined in the CBN’s latest recapitalization framework.
In an official statement released on Thursday, Wema Bank proudly announced that its total qualifying capital has now reached an impressive N214.7 billion, comfortably exceeding the regulatory threshold of N200 billion.
The rights issue, which opened its doors on April 14, 2025, and closed on May 21, 2025, was a strategic response to the CBN’s directive aimed at fortifying the Nigerian banking sector.
By embracing this initiative, Wema Bank has not only positioned itself as a leader in compliance but also as a robust player in the quest for sustainable development within the financial landscape of Nigeria.
“This rights issue was undertaken in response to the CBN’s directive on the recapitalisation of banks in Nigeria. With the successful completion and regulatory approval, Wema Bank has now met the N200 billion minimum capital requirement applicable to commercial banks with national authorisation,” the bank’s statement stated.
In addition to the rights issue, Wema Bank has concluded a N50 billion special placement, which is currently awaiting regulatory approval. This additional capital injection further reinforces the bank’s commitment to maintaining a strong capital base and supporting its strategic expansion initiatives.
CEO Expresses Confidence
Commenting on the milestone, Wema Bank’s Managing Director and Chief Executive Officer, Moruf Oseni, expressed confidence in the bank’s trajectory and the trust it enjoys from stakeholders.
“As a growth-driven bank, the industry recapitalisation requirement came as a welcome mission, and we undertook it with full confidence. Our success in surpassing the N200 billion benchmark ahead of the 2026 deadline not only reinforces our strong financial standing as a bank, but also attests to the mutual trust and confidence that exists between Wema Bank and its shareholders,” Oseni said.
Earlier in May, Wema Bank had announced its intention to raise an additional N50 billion through a private placement as part of its broader strategy to meet and exceed the CBN’s capital requirements.
At its Annual General Meeting (AGM), held electronically on May 22, 2025, shareholders formally adopted a resolution to secure this additional capital, signaling strong support for the bank’s growth agenda.
Under the CBN’s recapitalization framework, commercial banks with international authorization are required to maintain a minimum capital base of N500 billion, while those with national authorization, such as Wema Bank, must meet a N200 billion threshold.
Wema Bank’s swift and strategic response to these requirements highlights its resilience and forward-thinking leadership in Nigeria’s evolving financial landscape.
The Federal Competition and Consumer Protection Commission (FCCPC) has announced an impressive total of N10 billion in recoveries for consumers who were wronged, following a series of complaints directed at banks, fintech companies, and other entities.
This information was revealed in a statement issued on Thursday, which was signed by Ondaje Ijagwu, the Director of Corporate Affairs at the FCCPC.
The announcement comes in light of recent data that highlights the volume of consumer complaints received and subsequently resolved across major sectors of the Nigerian economy.
The data encompasses cases that were registered with the Commission between March and August 2025 and has been meticulously compiled from various complaint resolution platforms managed by the FCCPC.
“The top ten sectors by number of complaints received between March and August 2025 were led by banking (3,173 complaints), followed by Fast Moving Consumer Goods (FCMG) (1,543), fintech (1,442), and electricity (458).
“Other notable sectors included e-commerce (412), telecommunications (409), retail/wholesale/shopping (329), aviation (243), information technology (131), and road transport and logistics (114),” the Commission stated.
The Commission stressed that the data covers consumer grievances ranging from unfair charges, service failure, unauthorised deductions, deceptive marketing, poor disclosure of terms, product defects, and failure to provide redress within acceptable timelines.
“The total number of complaints resolved during the reporting period was 9091, while total recoveries for consumers exceeded N10 billion (Ten Billion Naira), reflecting both the scale of harm experienced and the significant financial burden borne by consumers in the absence of effective redress,” the FCCPC added.
Reacting to the findings, the Executive Vice Chairman/Chief Executive Officer of the Commission, Mr. Tunji Bello, said: “These numbers are not just statistics; they tell the story of consumer frustration, and the daily challenges Nigerians face in essential services. However, the FCCPC is determined to hold businesses accountable, ensure compliance with the FCCPA, and promote fair market practices that protect the welfare of all consumers.”
The publication of sector-specific complaint data is said to align with the Commission’s mandate under Sections 17(a), 17(j) of the FCCPA 2018, which empower it to enforce consumer protection laws and make information on its functions available to the public.
According to the report, Banking is the dominant source of consumer complaints, both in volume and financial exposure, highlighting recurring issues in loan deductions, account charges, and transaction disputes, and reflecting public reliance on the FCCPC to intervene in systemic financial service challenges.
“Banking and fintech dominate by financial impact, showing consumer vulnerability where services are both essential and high value, signalling an urgent need for stronger joint regulation with the Central Bank of Nigeria (CBN).
“With 458 reported complaints, the electricity sector ranks 4th overall, behind banking, financial services, and FCMG, highlighting persistent billing disputes, service delivery failures, and the need for stronger coordination between the FCCPC, NERC, state electricity regulatory agencies and electricity distribution companies (DisCos).
“E-commerce disputes are relatively low-value but high-frequency, signalling broad consumer exposure at the retail level. While average monetary losses per complaint are low, the volume and recurrence of disputes (deliveries, refunds, counterfeit goods) reveal e-commerce as a growing consumer pain point,” the statement added.
The Commission stated it is intensifying monitoring, enforcement, and collaboration with sector regulators to address these concerns.
The Commission encouraged regulated entities to study its data trends and strengthen internal mechanisms for handling consumer complaints, ensuring that issues are addressed promptly and equitably.
Consumers were encouraged to continue reporting violations through the FCCPC complaint portal: complaints.fccpc.gov.ng, or FCCPC zonal and state offices.
First Bank of Nigeria Limited (FirstBank) has secured a significant victory at the Court of Appeal in its case against General Hydrocarbons Limited (GHL) filed by their lawyers Babajide Koku SAN and Victor Ogude SAN, as reported by Nairametrics.
In its ruling on Thursday, 11 September 2025, the Court of Appeal set aside the earlier decision of the Federal High Court, Port. Harcourt, Obile J, which had dismissed FirstBank’s claims regarding the fraudulent diversion of proceeds from the sale of crude oil cargo pledged as collateral for loan facilities.
The dispute arose from crude oil aboard the FPSO Tamara Tokoni, which GHL had pledged to FirstBank as security for substantial loan facilities. Contrary to the terms of the pledge, GHL diverted the proceeds from the sale of the cargo, prompting the Bank to seek legal redress.
FirstBank filed an appeal challenging the trial court’s decision that had treated the matter as a simple debt recovery. The Court of Appeal, in its ruling, affirmed the maritime nature of the claim and emphasised the importance of preserving the Res, the crude oil cargo, as the central issue in dispute. The Court set aside the earlier order of the trial court vacating the order of arrest of the 2nd respondent.
The appellate court allowed FirstBank’s appeal and set aside the Federal High Court’s ruling. It authorised the sale of the crude oil cargo aboard FPSO Tamara Tokoni, with the proceeds to be deposited into an interest-yielding escrow account under the custody of the Chief Registrar of the Court of Appeal, pending the hearing and determination of the case at the trial court and the court of arbitration. The Chief Registrar was also appointed to take possession of the cargo and ensure its protection against dissipation or unauthorised disposition by any party.
This ruling marks a significant milestone for FirstBank and reinforces the Bank’s commitment to upholding the integrity of financial transactions and protecting the interests of its stakeholders.
FirstBank remains steadfast in its dedication to sound corporate governance, legal compliance, and the protection of its assets. The judgment of the Court of Appeal sets a strong precedent for the enforcement of collateral agreements and accountability in high-value commercial transactions.
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The Central Bank of Nigeria (CBN) has enacted more stringent controls while sustaining a lower exchange rate at the official windows. Click link to continue reading.
The black market exchange rate for the dollar to naira continues to highlight Nigeria’s forex supply challenges, with many individuals and businesses relying on the parallel market for transactions.
CBN maintains tighter controls and a lower rate at official windows, limited access and allocation restrictions force most importers, businesses, and students abroad to turn to the parallel market, where prices reflect actual demand and supply pressures. Click link to continue reading.
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