Buyers who remember fixed pump prices can find today’s market frustrating: a quote from last week may not hold this week. Understanding what drives the price makes it easier to plan purchases and budgets.
Deregulation
Diesel, kerosene and LPG have been priced by the market for years. Petrol joined them after the subsidy was removed in 2023. Without a government-set price, product costs pass through to buyers much faster than before.
Crude oil and the exchange rate
Refined products are priced internationally in US dollars. When crude prices rise, or when the naira weakens against the dollar, the naira cost of each litre rises with them — whether the product was imported or refined locally.
Local refining
New domestic refining capacity, including the 650,000 barrels-per-day Dangote refinery, has changed where product comes from and how depot prices are set. Supply announcements and pricing decisions from major refiners now move the market quickly.
Logistics
Distance from the depot, road conditions, trucking rates and security on the route all add to the delivered price. Two customers buying the same product on the same day can pay different prices simply because of where they are.
What buyers can do
- Ask for quotes with a clear validity period.
- Buy full truck loads where storage allows — part loads cost more per litre to deliver.
- Keep a consistent supplier relationship; credit terms and priority allocation follow reliable customers.