Private fuel depots in Lagos have sparked a price war in Nigeria’s downstream oil sector by offering diesel at rates below the ex-depot pricing of the Dangote Refinery. Over the past week, diesel prices have dropped nearly 3%, falling from ₦985 to ₦958 per litre, reflecting heightened competition and evolving market dynamics, according to industry sources.
As of Wednesday, October 8, 2025, depots such as TTIME, MENJ, GULF TREASURE, and DUPORT were selling Automotive Gas Oil (AGO) at ₦958 per litre, slightly below Dangote’s ex-depot price of ₦960 and the marketers’ benchmark of ₦862 per litre. Industry experts attribute this trend to an oversupply of diesel, with over 40 depots nationwide holding significant inventories, as reported by the Daily Oil and Gas Market Intelligence. The surplus is driven by reduced demand, as commercial users increasingly shift to alternative energy sources like solar power and Compressed Natural Gas (CNG) systems.
A senior oil marketer in Apapa, speaking anonymously, noted, “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.” This strategy has challenged Dangote Refinery’s pricing dominance, with private depots opting for lower rates to clear excess stock.
Industry analysts suggest that the competitive pricing could lead to further reductions if Dangote adjusts its prices to remain competitive. This trend is seen as a boon for consumers, particularly transport operators and manufacturing firms reliant on diesel, potentially lowering operational costs. However, concerns remain that sustained low profit margins could strain smaller marketers grappling with high logistics and financing costs.
The ongoing price adjustments highlight a shift toward a supply-and-demand-driven market in Nigeria’s downstream sector, moving away from refinery-controlled pricing and signaling potential benefits for consumers amid intensifying competition.
