The estimated spot landing cost of diesel in Nigeria has fallen by ₦127.28 per litre in two days, dropping to ₦1,696.40 per litre on October 2 from ₦1,823.68 recorded on September 30, according to the Major Energies Marketers Association of Nigeria (MEMAN).
The sharp decline, representing about 7 percent, has altered the short-term economics of importing Automotive Gas Oil (AGO), even as the broader diesel market continues to reflect higher costs.
MEMAN’s latest Energy Bulletin showed that the seven-day average AGO import-parity cost also declined, falling from ₦1,871.34 per litre on September 30 to ₦1,823.19 per litre on October 2.
The movement represents a ₦48.15 per litre, or about 2.6 percent, decline in the seven-day benchmark.
However, the 30-day average remained largely unchanged, rising marginally from ₦1,849.94 per litre to ₦1,851.77 per litre over the same period.
The divergence shows that the latest reduction has been concentrated in short-term spot economics and has yet to significantly alter the longer-term import-cost benchmark.
The development also changes the relationship between import-parity costs and Dangote Petroleum Refinery’s diesel pricing.
Dangote’s AGO gantry price remained unchanged at ₦1,780 per litre in the latest bulletin. The refinery’s price was ₦43.19 per litre below the seven-day import-parity estimate of ₦1,823.19 but ₦83.60 above the latest spot estimate of ₦1,696.40.
Two days earlier, the relationship was different, with the ₦1,823.68 spot import-parity estimate standing ₦43.68 above Dangote’s ₦1,780 per litre gantry price.
The latest figures therefore show that current spot import economics have moved below the domestic refinery’s unchanged gantry price, while the seven-day average remains above it.
The movement occurred despite relative stability in the foreign exchange market.
The seven-day average exchange rate stood at ₦1,329.77 per dollar on October 2, compared with ₦1,329.35 on September 30, a difference of just ₦0.42 per dollar.
The international diesel benchmark also weakened during the period, with the seven-day average for ICE Futures Europe falling from $1,457.07 per metric tonne to $1,441.32 per tonne.
That represents a decline of $15.75 per tonne, or about 1.1 percent.
Crude oil movements, however, were mixed. Brent rose slightly from $103.52 to $103.89 per barrel, while WTI increased from $91.61 to $91.98 per barrel. Bonny Light, meanwhile, declined from $122.67 to $121.08 per barrel.
The figures suggest that the reduction in diesel import parity was not driven by a broad decline in crude prices alone, with product benchmarks and other components of the import-parity calculation also influencing the movement.
The estimated import-parity calculation incorporates international product benchmarks, foreign exchange, financing, freight and statutory charges associated with bringing petroleum products into tank at Apapa.
The latest decline could influence diesel pricing decisions as marketers and depot operators reassess replacement costs against current market quotations.
With the spot import-parity estimate now below both Dangote’s gantry price and the 30-day average, operators may have greater room to reassess near-term diesel supply costs.
However, the higher seven-day and 30-day averages indicate that the broader cost structure remains elevated despite the sharp short-term decline.
The latest data therefore points to a changing diesel market in which current replacement economics are moving faster than the longer-term import-cost benchmarks.
The direction of international product prices, exchange rates and freight costs will determine whether the recent decline in spot landing cost is sustained and eventually reflected more broadly across the diesel market.