A wave of price cuts by private depots in Lagos has intensified competition in Nigeria’s downstream oil sector, with diesel prices dropping nearly 3% from ₦985 to ₦958 per litre over the past week, undercutting the ex-depot pricing of the Dangote Refinery, according to industry sources.
As of Wednesday, October 8, 2025, private depots such as TTIME, MENJ, GULF TREASURE, and DUPORT were offering 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.
This marks a significant shift in a market traditionally dominated by refinery-set prices, with supply and demand dynamics now driving pricing strategies.
The Daily Oil and Gas Market Intelligence reports that over 40 depots nationwide are currently holding substantial diesel inventories, signaling an oversupply that has outpaced demand.
Industry experts attribute this surplus to a growing shift among commercial users toward alternative energy sources like solar power and Compressed Natural Gas (CNG) systems, reducing diesel consumption.
As a result, marketers are grappling with excess stock and resorting to aggressive price reductions to clear inventories.“Most depots are struggling to sell.
The tanks are full, vessels are discharging, and buyers are waiting for prices to fall further,” a senior oil marketer in Apapa told The Guardian.
“The only way to move products now is to undercut the big players.”The Dangote Refinery, a key player in Nigeria’s energy landscape, has set a standard ex-depot price for AGO, but private depots’ lower rates are challenging its pricing model.
Analysts suggest that if Dangote responds by further reducing prices to remain competitive, consumers could see additional price drops in the near term.
This competitive pricing trend is poised to benefit consumers, particularly transport operators and manufacturing firms reliant on diesel for operations.
However, experts warn that sustained low profit margins could strain smaller marketers already burdened by high logistics and financing costs, potentially reshaping the downstream sector.
The ongoing price war indicates a broader evolution in Nigeria’s oil market, where oversupply and changing energy preferences are forcing marketers to adapt.
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