ABUJA, Nigeria – August 25, 2025 – The National Bureau of Statistics (NBS) has released its latest Automotive Gas Oil (Diesel) Price Watch report, revealing a slight decline in the average retail price of Automotive Gas Oil (diesel) across Nigeria, dropping to N1,789.45 per litre in July 2025. This marks a modest 1.34 percent decrease from the N1,813.81 per litre recorded in June 2025. However, despite this month-on-month reduction, the report underscores a significant year-on-year surge of 29.72 percent compared to the N1,379.48 per litre recorded in July 2024, highlighting the persistent economic pressures facing Nigerian consumers and businesses. The report also sheds light on regional disparities in diesel prices and provides insights into Nigeria’s inflation trends, which continue to shape the nation’s economic landscape.
A Modest Decline Amidst a Year of Rising Costs
The NBS’s July 2025 Diesel Price Watch report offers a mixed picture of Nigeria’s fuel market, reflecting both short-term relief and long-term challenges. The 1.34 percent month-on-month decline in diesel prices, from N1,813.81 in June to N1,789.45 in July, provides a glimmer of hope for consumers and industries reliant on diesel, which powers everything from transportation and logistics to manufacturing and agriculture. This reduction, though modest, comes as a welcome respite in a country grappling with high inflation and rising living costs.
However, the year-on-year increase of 29.72 percent paints a starkly different picture. In July 2024, the average diesel price stood at N1,379.48 per litre, significantly lower than the current figure. This steep annual rise reflects the broader economic challenges facing Nigeria, including the lingering effects of the 2023 fuel subsidy removal, global oil price volatility, and supply chain disruptions. Diesel, a critical fuel for Nigeria’s economy, has become a barometer of the country’s economic health, with price fluctuations directly impacting businesses, transportation costs, and the cost of goods and services.
The NBS report, based on data collected from over 10,000 respondents across 774 local government areas in Nigeria’s 36 states and the Federal Capital Territory (FCT), provides a comprehensive snapshot of diesel price trends. The data collection process, conducted by over 700 NBS staff and monitored by quality control officers, ensures robust and representative estimates derived from household expenditure patterns and actual fuel purchase prices. The report’s findings highlight not only national trends but also significant regional and state-level variations, underscoring the uneven economic realities across Nigeria’s diverse regions.
Regional and State-Level Disparities
The NBS data reveals stark disparities in diesel prices across Nigeria’s states and geopolitical zones, reflecting differences in infrastructure, logistics, and economic conditions. Benue State recorded the highest average retail price in July 2025, at N2,341.46 per litre, followed closely by Adamawa State at N2,163.88 and Plateau State at N2,029.71. These states, all located in the North-Central and North-East zones, have consistently topped the list of highest diesel prices from April to July 2025, a trend the NBS attributes to logistical challenges, including poor road networks and limited access to fuel depots.
At the other end of the spectrum, Ondo State reported the lowest average diesel price at N1,465.71 per litre, followed by Zamfara at N1,470.35 and Gombe at N1,485.00. The shift in the lowest-price states is notable, as Ondo, Zamfara, and Gombe replaced Kogi and Anambra, which had held the lowest prices in April and May 2025. This change suggests evolving supply dynamics, possibly driven by improved distribution networks or localized market conditions in these states.
Regionally, the South-South zone recorded the highest average diesel price at N1,941.98 per litre, a reflection of the region’s reliance on imported fuel and its distance from major refining hubs. In contrast, the South-West zone reported the lowest regional average at N1,619.06 per litre, likely benefiting from proximity to Lagos, Nigeria’s commercial capital and a major hub for fuel distribution. The North-Central zone, comprising seven states and the FCT, averaged N1,873.94, while the North-West recorded N1,769.47. The South-East and North-East zones reported averages of N1,753.13 and N1,762.32 per litre, respectively.
These regional variations highlight the structural challenges in Nigeria’s fuel supply chain, including inadequate refining capacity, reliance on imports, and disparities in transportation infrastructure. For instance, the South-South’s high prices may be linked to its coastal location, where fuel is often transported by sea, incurring additional costs. Conversely, the South-West’s lower prices reflect its access to major ports and distribution networks. These disparities have significant implications for businesses and consumers, particularly in regions where high diesel prices exacerbate the cost of living and doing business.
Inflation Trends: A Slowing but Persistent Challenge
In addition to diesel price data, the NBS report provides critical insights into Nigeria’s inflation trends, which continue to shape the economic environment. The headline inflation rate for July 2025 slowed slightly to 21.88 percent, down from 22.22 percent in June 2025. This modest decline offers a cautious sign of stabilization, but the rate remains significantly high, reflecting the ongoing impact of economic reforms, currency depreciation, and global commodity price fluctuations.
Core inflation, which excludes volatile items like food and energy, also eased to 21.33 percent on a year-on-year basis in July 2025, marking a 6.13 percent decline from the 27.47 percent recorded in July 2024. This reduction suggests that some of the structural drivers of inflation, such as supply chain bottlenecks and currency pressures, may be moderating. However, the persistently high inflation rate continues to erode purchasing power, particularly for low-income households and small businesses that rely heavily on diesel for operations.
The interplay between diesel prices and inflation is particularly significant in Nigeria, where fuel costs directly influence transportation, manufacturing, and agriculture. The 29.72 percent year-on-year increase in diesel prices has contributed to higher production costs, which are often passed on to consumers in the form of elevated prices for goods and services. For example, the transportation sector, a major consumer of diesel, has seen fares rise sharply, affecting commuters and the cost of transporting agricultural produce to markets. Similarly, industries reliant on diesel-powered generators, a necessity in Nigeria’s unreliable electricity landscape, face increased operational costs, further driving inflation.
Economic and Social Implications
The NBS report’s findings have far-reaching implications for Nigeria’s economy and its citizens. Diesel, unlike petrol, is primarily used by businesses, heavy industries, and commercial transport, making its price a critical factor in the cost structure of numerous sectors. The slight month-on-month decline in July 2025 offers some relief, but the significant year-on-year increase underscores the challenges businesses face in maintaining profitability amidst rising costs. Small and medium enterprises (SMEs), which form the backbone of Nigeria’s economy, are particularly vulnerable, as they often lack the financial cushion to absorb fuel price hikes.
For consumers, the ripple effects of high diesel prices are felt in the form of increased prices for goods and services. In markets across Nigeria, the cost of staples like rice, yam, and cooking oil has surged, driven by higher transportation and production costs. In rural areas, where agriculture is a primary livelihood, farmers face challenges transporting their produce to urban markets, further straining food supply chains. The NBS’s data on inflation reinforces these concerns, as the 21.88 percent headline rate continues to outpace wage growth, leaving many Nigerians struggling to afford basic necessities.
The regional disparities in diesel prices also highlight Nigeria’s uneven economic development. States like Benue, Adamawa, and Plateau, which consistently report the highest prices, are among the most economically disadvantaged, with limited industrial activity and infrastructure. High fuel costs in these regions exacerbate poverty and hinder economic growth, as businesses face higher operational expenses and consumers grapple with elevated living costs. In contrast, states like Ondo, with lower diesel prices, benefit from better access to supply chains, illustrating the structural inequalities that characterize Nigeria’s economy.
The Broader Context: Nigeria’s Energy Landscape
The NBS report must be understood within the broader context of Nigeria’s energy sector, which has faced significant challenges in recent years. The removal of fuel subsidies in 2023, a flagship policy of President Bola Tinubu’s administration, was intended to free up resources for infrastructure and social programs while aligning domestic fuel prices with global market rates. However, the policy has led to sharp increases in fuel prices, including diesel, contributing to inflation and public discontent. While the government has touted the long-term benefits of subsidy removal, such as increased investment in domestic refining, the short-term impact has been painful for consumers and businesses.
Nigeria’s reliance on imported diesel, despite being one of Africa’s largest oil producers, remains a critical issue. The country’s refineries, including those in Port Harcourt, Warri, and Kaduna, have been largely non-operational for years, forcing Nigeria to import the majority of its fuel needs. The recent commissioning of the Dangote Refinery, Africa’s largest, was expected to boost domestic diesel production and stabilize prices. However, logistical challenges, including delays in distribution and regulatory hurdles, have limited its impact on retail prices thus far.
Global oil market dynamics also play a role in Nigeria’s diesel price trends. In 2025, fluctuations in crude oil prices, driven by geopolitical tensions and supply chain disruptions, have kept diesel prices volatile. Nigeria’s dependence on imported fuel exposes it to these global pressures, as exchange rate fluctuations further inflate costs. The naira’s depreciation against the dollar, a persistent challenge since the 2023 forex liberalization, has compounded these issues, making imported diesel more expensive for Nigerian consumers.
Stakeholder Reactions and Policy Debates
The NBS report has sparked a range of reactions from stakeholders, reflecting the complex interplay of economic, political, and social factors in Nigeria’s fuel market. Industry leaders, particularly in the transportation and manufacturing sectors, have welcomed the slight month-on-month decline in diesel prices but expressed concern about the year-on-year increase. “The drop from June to July is a small relief, but it’s not enough to offset the 30 percent rise compared to last year,” said Alhaji Musa Abdullahi, president of the National Association of Road Transport Owners (NARTO). “Our members are struggling to keep fares affordable while covering rising fuel costs.”
Consumer advocacy groups have called for greater government intervention to stabilize diesel prices and address inflation. “The government must prioritize domestic refining and invest in infrastructure to reduce transportation costs,” said Dr. Felicia Adebayo, a spokesperson for the Consumer Rights Advocacy Network. “High diesel prices are driving up the cost of everything, and ordinary Nigerians are bearing the brunt.”
The opposition, led by the Peoples Democratic Party (PDP), has seized on the NBS report to criticize the APC-led government’s economic policies. In a statement, the PDP accused the Tinubu administration of failing to mitigate the impact of subsidy removal on vulnerable populations. “The slight drop in diesel prices is meaningless when inflation remains at 21.88 percent and Nigerians can’t afford basic goods,” said Alhaji Yahaya Ability, a PDP leader in Niger State. “This government has no plan to address the suffering of the masses.”
In response, the APC defended its economic reforms, arguing that they are necessary for long-term growth. A spokesperson for the Ministry of Petroleum Resources, who spoke on condition of anonymity, highlighted ongoing efforts to boost domestic refining capacity, including partnerships with private refineries like Dangote. “We are working to reduce Nigeria’s dependence on imported fuel, which will stabilize prices in the long run,” the spokesperson said. “The current challenges are part of the transition to a more sustainable energy sector.”
Regional Perspectives: Voices from the Ground
The regional disparities in diesel prices have elicited varied responses from residents and businesses across Nigeria. In Benue State, where diesel prices are the highest, farmers and small business owners expressed frustration with the economic burden. “At N2,341 per litre, it’s almost impossible to transport our crops to markets profitably,” said Grace Ior, a yam farmer in Makurdi. “The government needs to do something about fuel prices, or we’ll keep losing money.”
In contrast, residents of Ondo State, which enjoys the lowest diesel prices, acknowledged the relative affordability but called for broader economic relief. “Yes, diesel is cheaper here, but everything else is expensive because of inflation,” said Tunde Adeyemi, a shop owner in Akure. “The government should focus on stabilizing prices across the board, not just fuel.”
In the South-South, where diesel prices are the highest regionally, businesses are grappling with increased operational costs. “We rely on diesel generators because the power supply is unreliable,” said Ejiro Okonkwo, a factory owner in Port Harcourt. “At N1,941 per litre, our production costs are through the roof, and we have no choice but to pass those costs to customers.”
Policy Recommendations and the Path Forward
The NBS report underscores the need for targeted policy interventions to address Nigeria’s fuel price challenges and their broader economic implications. Experts have proposed several measures to stabilize diesel prices and mitigate inflation, including:
Boosting Domestic Refining Capacity: Accelerating the operationalization of Nigeria’s refineries, including the Dangote Refinery, could reduce reliance on imported diesel and stabilize prices. The government should address regulatory and logistical bottlenecks to ensure efficient distribution.
Investing in Infrastructure: Improving road networks and fuel distribution systems, particularly in high-cost regions like the North-Central and South-South, could reduce transportation costs and narrow regional price disparities.
Strengthening the Naira: Addressing currency depreciation through sound monetary policies could mitigate the impact of imported fuel costs. The Central Bank of Nigeria (CBN) should work to stabilize the forex market and reduce volatility.
Targeted Subsidies for Vulnerable Sectors: Providing temporary subsidies or tax relief for diesel-dependent industries, such as transportation and agriculture, could ease the burden on businesses and consumers while long-term solutions are implemented.
Enhancing Transparency: The government should improve transparency in fuel pricing and distribution, ensuring that consumers and businesses have access to clear information about price determinants and supply chain dynamics.
Conclusion
The NBS’s July 2025 Diesel Price Watch report offers a nuanced view of Nigeria’s fuel market, highlighting a modest month-on-month decline in diesel prices alongside a significant year-on-year increase. While the slight drop from N1,813.81 to N1,789.45 per litre provides some relief, the 29.72 percent annual rise underscores the persistent economic challenges facing the country. Regional disparities, with prices ranging from N1,465.71 in Ondo to N2,341.46 in Benue, reflect structural inequalities in Nigeria’s fuel supply chain and broader economy.
The report’s findings on inflation, with the headline rate slowing to 21.88 percent, offer cautious optimism but highlight the ongoing pressure on consumers and businesses. As Nigeria navigates its complex economic landscape, the government must prioritize policies that address fuel price volatility, boost domestic refining, and mitigate inflation’s impact on vulnerable populations. The voices of farmers, business owners, and consumers across the country underscore the urgency of these measures, as Nigerians demand tangible solutions to ease their economic burdens.
For now, the slight decline in diesel prices offers a glimmer of hope, but the road to economic stability remains long and fraught with challenges. As the Tinubu administration works to deliver on its promises of reform, the NBS report serves as a critical reminder of the need for inclusive, transparent, and effective policies to secure Nigeria’s economic future.
