Diesel prices in Nigeria have dropped by as much as 10% over the past month, the sharpest monthly decline recorded in the last three years. For the first time in a long while, prices have fallen by nearly ₦100 per litre at the depot level. This brings average rates below the ₦1,000 mark. It also marks the lowest diesel pricing Nigeria has seen in over two years.
The drop is driven by a mix of supply increases, crude oil price declines, and stiff competition between depot owners and Dangote Refinery.
Depot Price Movements Reflect Historic Drop
From April 9 to May 9, depot-level diesel prices recorded significant decreases:
- CHIPET fell from ₦1,015 to ₦912 — a 10.15% decrease
- MAO dropped from ₦1,008.64 to ₦910 — a 9.77% decrease
- DANGOTE declined from ₦1,012.58 to ₦930 — an 8.15% decrease
This shows a near-uniform downward movement across major marketers. The trend confirms a sustained and broad-based reduction, breaking from months of volatility.
What’s Driving the Diesel Price Crash
Oversupply Relative to Demand
A major driver is excess product availability. Import volumes and local refining outputs have outpaced demand. This oversupply has led to pricing pressure and adjustments across the board.
Depot Competition and Dangote’s Entry
The Dangote Refinery has reshaped diesel pricing since joining the market. Though it paused naira-denominated sales in March, it has resumed supplies and now competes directly with other depots. The resulting price war has forced all players to adjust downward to stay competitive.
Fall in Global Crude Prices
Brent crude is nearing $65 per barrel. WTI Crude is now around $61. These declines have lowered international landing costs for refined products. That has helped push diesel prices down in the Nigerian market.
Economic and Sectoral Implications
Transport and Logistics
The transport sector relies heavily on diesel. The drop reduces costs for fleet operators, logistics companies, and independent drivers. This may help lower prices for transported goods.
SMEs and Diesel-Dependent Businesses
Small and medium enterprises often rely on diesel generators due to power grid instability. Cheaper fuel means lower running costs. That improves business margins and can help protect jobs.
Agriculture and Food Security
Farmers use diesel for irrigation, machinery, and transport. Lower prices ease production costs. This could help stabilize food supply and prices, especially in rural areas.
Conclusion: A Market Turning Point
A 10% diesel price drop in one month is the steepest since 2022. Depot rates have fallen below ₦1,000, offering relief to businesses and households. With stable supply and falling crude prices, the market has shifted in favor of consumers.
This could mark a rare economic breather for Nigeria’s fuel-reliant sectors. Sustaining this trend will depend on continued supply efficiency, fair market practices, and downstream sector coordination.
