Manufacturing companies in Nigeria are increasingly shifting from diesel to natural gas as rising fuel prices continue to strain production costs and reduce profit margins across the industrial sector.
Industry stakeholders say the energy transition is being driven by the persistent surge in diesel prices, worsened by global geopolitical tensions, including disruptions in the Middle East and the Strait of Hormuz, which have pushed up crude oil and refined fuel costs.
At a business and investment forum organised by Shell Nigeria Gas in Port Harcourt, the Board Chairman of the Niger Delta Chambers of Commerce, Industry, Trade, Mines and Agriculture, Idaere Gogo Ogan, said wider adoption of gas could significantly transform industrial productivity in the region.
He noted that over 500 companies in the Niger Delta had shut down in recent years due to harsh operating conditions, adding that access to affordable and reliable energy remains key to reviving industrial activity.
According to stakeholders, manufacturers that have switched to gas are already benefiting from more stable pricing, improved operational efficiency, and reduced exposure to volatile global fuel markets.
The forum also witnessed the onboarding of new industrial customers, including Intercontinental Distillers Limited II and Rumbu Industries Limited, into Shell Nigeria Gas distribution network, with additional agreements signed with Boskel Nigeria Limited and Bluefinn Global Resource Limited in Rivers and Bayelsa States.
The company said its expanding network now serves over 150 industrial customers across Abia, Bayelsa, Ogun and Rivers States, supplying energy equivalent to about 4 megawatts of electricity for some clients.
Officials explained that natural gas offers a more predictable and cost-effective alternative to diesel, while also improving production uptime and reducing exposure to fuel supply disruptions.
In the telecommunications sector, the diesel crisis is also intensifying operational challenges. Many telecom operators across Africa rely heavily on diesel generators to power base stations, particularly in areas with weak or unreliable electricity grids.
Industry data shows that up to 70 per cent of telecom towers in Africa depend on diesel, with fuel costs accounting for as much as 60 per cent of operational expenses in some markets. Analysts also estimate that annual global spending on generator fuel reaches tens of billions of dollars.
Experts warn that rising diesel costs could force operators to increase tariffs or reduce investment in network expansion, especially in rural and underserved communities.
With grid reliability in some African countries as low as 40 to 50 per cent, operators are increasingly exploring alternatives such as solar hybrid systems and satellite connectivity to reduce dependence on diesel.
Energy analysts say the shift is no longer driven only by environmental concerns but by economic necessity, as renewable energy and alternative technologies become more cost-competitive than diesel-powered systems.
Stakeholders at the forum urged wider adoption of gas infrastructure, noting that it could help revive manufacturing, stabilize industrial output, and reduce Nigeria’s vulnerability to global energy shocks.
They added that improving access to cleaner and more reliable energy sources remains critical for sustaining industrial growth, attracting investment, and strengthening economic resilience across emerging markets.
