Nigerian small businesses now spend more than 80 per cent of their profit on alternative energy, according to the Association of Small Business Owners of Nigeria, as a fresh diesel price increase adds to a cost burden that has already grown sharply this year. The warning follows Dangote Petroleum Refinery’s decision to raise its diesel gantry price to N1,840 per litre from N1,800, effective Wednesday, 28 October 2026.
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The price move
The N40 increase is about 2.2 per cent. The refinery told customers to return their Authority to Collect documents for repricing and said it would issue new volume contracts so that loading could resume immediately at the new price. BusinessDay found Lagos depots such as T.Time, Menj and Ibachem selling at N1,840 per litre, while Rain Oil and Prudent in Warri listed diesel at N1,890.
Depot competition followed quickly. Within a day, Duport and Ibachem cut their Lagos prices to N1,825 per litre, N15 below the refinery’s rate.
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How much energy now costs
ASBON President Femi Egbesola said the share of profit that small firms spend on alternative energy has risen from more than 40 per cent to more than 80 per cent. The Manufacturers Association of Nigeria estimates that its members spent N1.35 trillion on alternative energy in 2025, up 23 per cent from N1.1 trillion in 2024.
A business that spends four-fifths of its profit on power has very little left to hire, restock or expand. At that ratio, energy decides whether a business grows or merely survives.
BusinessDay noted that the increase falls on factories that burn diesel to compensate for an unreliable grid. Unreliable energy, the report said, continues to erode profitability, weaken competitiveness and discourage fresh investment.
Petrol is easing, diesel is not
The two fuels moved in opposite directions this week. Dangote Refinery cut its petrol depot price to N1,290 per litre on 29 October, down N18 from N1,308, making it the cheapest supplier among the Lagos depots reviewed by Legit.ng. Pinnacle and Rainoil sell at N1,300, while MRS and NIPCO sell at N1,310. For businesses that run diesel generators or diesel-powered vehicles, the petrol relief changes little.
Read also: Tinubu rules out fuel subsidy return, gives states until October for cheaper transport
What small businesses can do
The depot price war suggests buyers have some room to negotiate, particularly those who can collect larger volumes. Beyond that, the lasting answer lies in reducing generator dependence. The Tinubu Light Initiative, announced in August to bring affordable renewable energy to one million MSMEs, is the clearest federal response to the problem.
For the businesses paying N1,840 a litre today, the value of that programme depends on how quickly it moves from announcement to installation.
