Private depots in Lagos offering rates lower than Dangote’s ex-depot pricing. Over the past week, diesel costs have fallen by nearly 3%, dropping from ₦985 to ₦958 per litre. This change indicates increased competition and evolving market conditions in Nigeria’s downstream oil sector.
Industry experts are calling this unforeseen trend a price adjustment due to an oversupply, indicating the potential onset of an extensive price competition among leading fuel providers.
As of Wednesday, October 8, 2025, a number of private depots, including TTIME, MENJ, GULF TREASURE, and DUPORT, were selling Automotive Gas Oil (AGO) at a price of ₦958 per litre. This price is slightly below Dangote’s ex-depot price of ₦960 and the marketers’ benchmark price of ₦862 per litre. This situation underscores the increasing competition within Nigeria’s downstream sector, where pricing is becoming more influenced by supply and demand rather than being dictated by refineries.
According to the Daily Oil and Gas Market Intelligence, there are now over 40 depots nationwide with diesel stored in their tanks. Industry experts suggest that this significant accumulation of inventory indicates that supply has greatly exceeded demand, leading to the recent decrease in prices.
Due to a shift towards alternative energy sources like solar power and CNG systems by numerous commercial users, there has been a decline in diesel usage. This shift has resulted in a surplus, leaving marketers with vast amounts of unsold diesel. To reduce this excess inventory, marketers are now resorting to significant price reductions.
A senior oil marketer in Apapa, said, “most depots are struggling to sell. The tanks are full, vessels are discharging, and buyers are waiting for prices to fall further. The only way to move products now is to undercut the big players.”
Although the Dangote Refinery sets a standard ex depot price for AGO, private depots are choosing to offer even lower prices, which challenges the Refinery’s pricing strategy. According to industry experts, if Dangote opts to further decrease its prices to stay competitive, Nigerians might experience another phase of price reductions.
Experts suggest that this competition may benefit consumers, particularly transport operators and manufacturing companies dependent on diesel for their operations. However, some caution that persistently low profit margins could put pressure on smaller marketers, who are already struggling with high logistics and financing expenses.