Dangote Refinery’s Diesel Price Cut Sparks Widespread Market Reaction
- Depot operators in Nigeria have slashed the prices Automotive Gas Oil (AGO) or diesel as competition heats up
- Driven by Dangote Refinery’s N910 price reduction, the depots are fighting hard to stay competitive
- Analysts have said that glut in the market and fierce competition are driving the race for price cuts
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria’s diesel market is witnessing a major shake-up as oversupply pressures and intense competition push depot operators to slash prices.
The development follows Dangote Refinery’s bold move to cut its ex-depot price of Automotive Gas Oil (AGO) to ₦910 per litre in October.
Source: Getty Images
The refinery’s strategic pricing has sent ripples through Lagos depots, triggering a wave of reductions and redefining the downstream petroleum landscape.
Oversupply, competition drive market adjustment
According to verified market intelligence from Petroleumprice.ng, the Lagos depot market has entered a new phase of fierce competition—driven by oversupply and Dangote’s new pricing benchmark.
Out of 52 active depots in Lagos, more than 30 currently hold AGO stock, resulting in a glut that has forced independent marketers to cut prices.
Industry sources say Dangote Refinery first reduced its AGO price to ₦910 per litre around October 15, 2025, maintaining that rate through early November.
This decision has forced other depots, which previously sold at higher margins, to lower their rates to remain competitive.
Depots slash prices to match Dangote’s benchmark
A price monitoring exercise conducted on November 4, 2025, revealed near-uniform adjustments across several Lagos depots:
- Menj: ₦919/litre
- Mao: ₦918/litre
- Wosbab: ₦919/litre
- Aipec: ₦919/litre
- AA Rano: ₦919/litre
These rates, just slightly above Dangote’s benchmark, reflect the refinery’s growing dominance in stabilising Nigeria’s diesel market through increased domestic refining output.
Dangote factor reshapes downstream petroleum dynamics
Analysts say the “Dangote factor” has become a decisive force in Nigeria’s downstream oil sector.
By introducing locally refined diesel at competitive prices, the refinery has compelled traditional import-dependent depots to adjust their pricing strategies, narrowing the cost gap between imported and domestically refined AGO.
A senior Lagos depot operator told Petroleumprice.ng that Dangote’s decision “changed the rhythm of the market overnight,” adding that traders have struggled to keep pace with the new pricing realities since mid-October.
Supply surge strengthens market stability
Industry data also points to a surge in diesel availability. Verified shipping and depot reports indicate that sustained inflows of refined AGO, from both Dangote Refinery and private importers, have significantly increased Lagos depot stock levels in the past three weeks.
This surge has eased earlier supply constraints and pushed average depot prices down from ₦960–₦980 per litre in September to ₦910–₦920 per litre currently.
Analysts predict further price softening
Energy experts believe that continued stability in Dangote’s refining operations will keep pressure on wholesale diesel prices, possibly leading to further declines in the coming weeks.
However, they caution that logistics costs, exchange rate fluctuations, and state-level tax differences may still affect final retail prices across regions.
NNPC joins the trend with petrol price cuts
The diesel price reductions come shortly after Dangote Refinery and other importers announced similar cuts in petrol prices.
The 650,000-barrel-per-day Dangote Refinery recently lowered its ex-depot petrol rate amid strong competition in the downstream sector.
In a related move, the Nigerian National Petroleum Company Limited (NNPC) also trimmed petrol prices nationwide.
According to Legit.ng, NNPC reduced its PMS price to ₦945 per litre on November 2, down from ₦955, a ₦10 cut.
In Lagos, prices dropped slightly from ₦922 to ₦920 per litre, while in Akwa Ibom, the average fell from ₦955 to ₦950. Niger State recorded one of the sharpest declines, from ₦945 to ₦920 per litre.
Source: Getty Images
In summary, Dangote Refinery’s pricing strategy has triggered a chain reaction across Nigeria’s downstream petroleum market, ushering in what industry observers call a new era of price competition, domestic supply dominance, and potential relief for diesel consumers.
Imported petrol cheaper than Dangote's price
Legit.ng earlier reported that the landing cost of imported Premium Motor Spirit (PMS) has dropped below the price of locally refined petrol from the Dangote Refinery, even after the Federal Government’s new 15% import tariff.
According to the Major Energies Marketers Association of Nigeria (MEMAN), imported petrol landed at ₦829.77 per litre as of October 30, compared to the Dangote refinery’s ₦877 per litre ex-depot price.
This represents a further decline from ₦849.61 recorded on October 13, showing a consistent downward trend in import costs.
Source: Legit.ng
