Distance university education has come a long way in Nigeria. It started as a dual mode and today has both the dual and single modes. However, the system has been faced majorly with the challenge of inadequate funding. This has hampered the success rate of the system. Therefore for the purpose of appropriate utilisation of the available fund, it is necessary that the knowledge of the unit cost of cost drivers is gained. This will help in re-directing and prioritising the available fund. To meet this purpose, five research questions were raised and answered. Descriptive survey research design was used. Checklist served as the instrument used to obtained data from the sampled institutions. The data collected were analysed using econometric formulas and charts. The findings revealed that cost drivers in Nigerian distance education programmes have not attained adequate unit costs. High enrolment and proper planning before commencement of programmes were recommended. (Contains 5 tables and 5 figures.)