Despite Nigeria’s deregulation, depot petrol prices move independently of crude oil costs. Learn how speculative pricing dominates and how Dangote’s refinery may shift power dynamics.
Petrol Prices in Nigeria: Unmasking the Truth Behind Depot Pricing
In Nigeria’s deregulated fuel economy, one dangerous assumption continues to mislead, that depot petrol prices mirror global crude oil fluctuations. Yet, the facts tell a very different story.
While international oil prices have seen modest movements recently, depot owners continue to impose significant hikes—exposing a fuel supply chain driven more by speculation than economics.
Myth 1: Depot Prices Only Rise When Crude Oil Soars
Truth: Even minor global changes spark disproportionate hikes at Nigerian depots.
Between June 10 to 16, 2025, global crude prices either fell or held steady:
Brent fell from $74.87 to $73.14 (−2.3%)
WTI dropped from $73.76 to $71.86 (−2.57%)
Bonny Light remained stable at $76.94
Yet depot prices jumped by ₦40 to ₦60 per litre. This is not cost-reflective—it’s speculative behaviour.
Myth 2: Depot Prices Drop When Crude Oil Falls
Truth: Even a 10 percent plunge in crude didn’t shift depot prices significantly.
On April 2, 2025, Brent fell by 10.2 percent (from $87.65 to $78.75). Yet leading depots like AITEO, Rain Oil, and Prudent Energy barely reduced their pump prices—some by just ₦10, others not at all.
A 10 percent drop in crude resulted in less than 2 percent price reduction at the depots.
Myth 3: Depot Pricing Reflects Real-Time Supply Costs
Truth: Nigerian depot prices are driven by anticipation, not reality.
Depot operators often cite FX fluctuations or “replacement cost” as reasons for price hikes. But as the recent Tanker Position Report shows, many of these arguments don’t hold water.
Five tankers recently loaded PMS or AGO from Dangote Refinery and delivered to depots:
ST AMRAH – PMS (38,000 MT) to PPMC depot
WESTMORE – AGO (28,000 MT) to NIPCO depot
ST LADY MEENAH – AGO (20,000 MT) to Deepwater Jetty
OLUWAJUWONLO – AGO (18,000 MT) to Rain Oil depot
AYODEJI – AGO (16,500 MT) to PPMC depot in Onne
These loadings confirm that Dangote Refinery is gradually entering the domestic supply space, yet depots still peg prices on rumours of oil price increases, not verified data.
Myth 4: Crude Oil Is a Minor Input in Petrol Pricing
Truth: Crude makes up 70 to 80 percent of refined petrol cost.
Whether refined locally or abroad, the bulk of the cost of petrol is crude oil itself. So, a one percent rise in crude should, logically, translate to no more than a one percent increase in depot pricing.
In Nigeria, however, depot mark-ups of five to six percent on a one percent rise are now the norm driven by fear of scarcity, monopoly control, and a lack of pricing transparency.
Myth 5: Deregulation Guarantees Price Stability
Truth: Deregulation without competition simply hands pricing control to depots.
Before June 2023, petrol prices were subsidised. Post-subsidy, the same few depot owners control the price narrative, and they often inflate prices on speculation, not actual supply costs.
Impact on Nigerians
These myths have real consequences:
Petrol prices may rise to ₦900 to ₦930 per litre this month
Diesel may cross ₦1,200 per litre, especially inland
Transport, food, and logistics costs will spike
Inflation will worsen, impacting small businesses and households
The Way Forward
To fix Nigeria’s broken pricing logic, the country must embrace the following:
Full-scale supply by Dangote Refinery
Stable FX market access for fuel importers
Depot price regulation tied to actual crude data
Market competition enforced by regulators
Until then, the myth-driven pricing model will persist, punishing Nigerian consumers for market inefficiencies and opportunism.
