Nigeria’s diesel market turned sharply bullish on Monday as depot owners raised Automotive Gas Oil (AGO) prices within the trading day, following a surge in international crude prices and renewed concerns over the continued closure of the Strait of Hormuz.
Checks by Petroluemprice.ng reveled that the market opened with relatively low offers, with Duport, Integrated and African Terminal quoting ₦1,580 per litre, while Ibeto offered at ₦1,555/litre.
By midday, however, the pricing landscape had changed. Duport, Integrated and African Terminal increased their offers to ₦1,600/litre, while Ibeto made the largest adjustment, raising its price to ₦1,700/litre.
The Ibeto movement represented a ₦145 per litre increase from its morning offer, while the other three monitored depots added ₦20 per litre to their prices.
The sharp intra-day adjustments came as marketers reassessed the market following the rise in crude oil prices. With international benchmarks strengthening, depot owners became increasingly concerned that the cost of replenishing diesel stocks could rise if the bullish movement in the global oil market continues.
As a result, a number of depots reportedly stopped selling during the day rather than commit available volumes at their earlier prices. The decision reflects growing caution among sellers as they assess where the market could settle and what fresh supplies may cost.
The Strait of Hormuz remains central to the market’s uncertainty. Iran has yet to reopen the strategic waterway, while negotiations over the conditions for restoring normal shipping remain unresolved. The prolonged disruption has heightened concerns about the movement of crude and petroleum products from the Middle East.
For Nigerian marketers, the immediate implication is a greater focus on replacement cost. A depot operator selling existing stock today must consider the price at which that volume can be replaced, particularly when international crude and shipping conditions are changing rapidly.
The key question for the downstream sector is whether Monday’s increase will be sustained. If crude prices remain elevated and Hormuz restrictions persist, marketers could continue to protect inventories and adjust replacement-cost expectations upwards.
However, a reversal in international crude prices or a credible agreement that restores normal shipping through Hormuz could ease the pressure on replacement costs and encourage depots to resume more competitive pricing.
For now, the intra-day reversal signals a more cautious diesel market, with depot operators increasingly pricing AGO according to the cost and availability of future supplies rather than relying solely on prevailing morning market offers.