Why Nigeria's Petrol Price Changes Four Times a Month

Between 21 August and 12 September, the gantry price at Dangote refinery — the price marketers pay when they load petrol at the plant — went up four times. It climbed from ₦1,165 to ₦1,350 a litre, an increase of ₦185, or about 15.9%, in twenty-two days.

Then on 22 September it came back down by ₦25 to ₦1,325, after Brent crude fell more than 3% to around $100.50 a barrel. Brent had traded as high as $109 the week before. Other depot suppliers moved with it: Ascon, Integrated, Pinnacle and Sahara cut to roughly ₦1,326 to ₦1,327, MRS to ₦1,332, Wosbab to ₦1,330.

At the pump, petrol was selling between ₦1,370 and ₦1,450, depending on where you bought it.

I want to argue something that will read as unsympathetic and is not meant to be: this volatility is not a malfunction. It is the design. The problem is that Nigeria adopted the design without ever teaching anyone how to live inside it, and the people paying for that gap are the ones with the least room to absorb a bad week.

What actually changed in 2023

For most of living memory, the petrol price in Nigeria was a political decision. The government set it, and the government paid whatever it cost to hold it there. That payment was the subsidy.

When the subsidy went, the price stopped being a decision and became an outcome. Now it is the result of four moving parts, none of which any Nigerian controls:

The crude price. Petrol is made from crude oil. When Brent moves from $109 to $100 in a week, the raw material got cheaper, and the finished product should follow.

The exchange rate. Crude is priced in dollars globally, even the crude produced here. A weaker naira raises the naira cost of the same barrel.

Refining and import economics. Petrol either gets refined locally or lands at a port. Industry body MEMAN publishes an estimated landing cost — what it costs to bring in a litre of imported petrol. On 8 September that figure was ₦1,311.36, against a thirty-day average of ₦1,216.34. When the landing cost climbs above the local gantry price, local supply becomes the cheaper option and depot prices come under pressure to rise toward it.

Logistics and margin. Getting the fuel from depot to your filling station in Port Harcourt or Maiduguri, plus whatever the station makes on it.

Those four inputs change daily. So the price changes often. That is not a scandal; it is arithmetic.

The part that is a scandal

Here is what I think Nigerians are entitled to be angry about, and it is more specific than "fuel is expensive."

Notice the shape of the movement. The gantry price rose ₦185 in three weeks and fell ₦25 in one move. Pump prices, meanwhile, sat between ₦1,370 and ₦1,450 — a spread of ₦80 a litre for the same commodity on the same day.

Economists have a name for this pattern. They call it rockets and feathers: retail prices shoot up like a rocket when the wholesale cost rises, and drift down like a feather when it falls. It is one of the most consistently observed behaviours in fuel retailing anywhere in the world, and it exists for a simple reason. When costs rise, a station that does not raise prices loses money on every litre, so it moves immediately. When costs fall, a station that does not cut prices simply earns a fatter margin until a competitor forces its hand — and if the competitor is far away, or also short on stock, nobody forces anything.

Deregulation is supposed to fix this through competition. Competition only disciplines prices where there is real choice. In a neighbourhood with two filling stations that both buy from the same depot, there is no meaningful competition, and the theory does not arrive.

So the honest sentence is this: Nigerians got the volatility of a deregulated market immediately, and they are still waiting for the competition that is supposed to compensate them for it.

The information gap nobody is closing

There is a second problem, and it is the one I find most fixable.

A marketer in Lagos knows the depot price, the landing cost, the crude benchmark and the trend. That marketer prices accordingly. A driver in Aba knows one number: what the board at the filling station says today. He has no way of knowing whether ₦1,430 reflects yesterday's depot price or a depot price from two weeks ago that has since fallen.

That asymmetry has a cost, and the cost falls entirely on the person with less information. When you cannot tell an expensive station from a fair one, you cannot reward the fair one. When you cannot reward the fair one, the market stops working the way deregulation promised it would.

This is why published, current, granular price data is not a nice-to-have for Nigeria. It is the missing half of the reform. A market without visible prices is not a free market; it is a private one.

What households and small businesses can actually do

I am wary of advice that amounts to "manage better" when the problem is structural. But there are things that genuinely change outcomes, and most people are not doing them.

Stop budgeting fuel as a fixed cost. If your monthly plan assumes ₦1,350 a litre, one bad fortnight breaks it. Budget on the high end of the recent range, and treat the difference as a saving when prices fall rather than as a surprise when they rise.

Track the depot trend, not the pump. Depot prices lead pump prices by a few days. If depot prices have been falling for a week and your station has not moved, you now know something useful: that station is holding margin, and another one nearby may already have cut.

For businesses, stop repricing on every move. The single most common error I see in small Nigerian businesses is repricing products every time fuel moves, which trains customers to expect instability and destroys the ability to plan. Build a fuel assumption into your pricing at the upper end of a quarterly range, and hold it for the quarter.

Treat generator fuel as the real fuel bill. For most small businesses in Nigeria, petrol and diesel for power, not for transport, is the larger line. It is also the line where solar or better load management pays back fastest, and the calculation improves every time the pump price rises.

The bottom line

The subsidy is not coming back in its old form, and no serious analysis suggests it should. It consumed money the country did not have, disproportionately benefited people who owned cars, and produced a smuggling industry that exported the benefit to neighbouring countries.

But removing a subsidy is only half a reform. The other half is building the conditions under which a deregulated price actually behaves like one: real competition at the pump, published prices, and a public that understands why the number moves.

Nigeria did the painful half. It has not yet done the useful half. Until it does, every household in the country is trading in a market where the other side can see the prices and they cannot — and being told that this is what freedom looks like.