Fuel Prices May Hit N650/Litre if Dangote-NNPCL Rivalry Continues.
Financial analyst and Chief Economist at SPM Professionals, Paul Alaje, has predicted that the price of Premium Motor Spirit (petrol) could drop to between N650 and N800 per litre if the ongoing price competition between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL) persists.
Speaking in a Channels Television interview on Tuesday, Alaje highlighted the potential benefits of the rivalry between the two industry giants for Nigerian consumers. However, he also warned of significant risks if the competition were to falter or if either entity were to collapse.
Alaje’s comments come in response to the recent reduction in petrol prices by both NNPCL and Dangote Refinery. He emphasized that the coexistence of these two major players in their current form is advantageous for Nigerians, as it fosters competition and drives down prices.
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“If there is more competition, because of the interest of capitalists to make a profit, eventually they will continue to reduce petrol prices if they don’t agree. Nigerians should be happy with their non-agreement. Once there is an agreement, they can fix prices. The truth is that you and I may have no option,” Alaje explained.
He stressed the importance of maintaining a competitive market, warning that the failure of either NNPCL or Dangote Refinery could have severe consequences for consumers. “The danger is that if NNPCL fizzles out, you face a pure capitalist, and you don’t want to know the implication. If it is Dangote Refinery that stops, you are back to Egypt. We need to have more players in the market,” he said.
Alaje further noted that increased competition is a natural outcome of deregulation and could lead to significant price reductions. “We, in fact, want more of the competition to go on because this is the consequence of deregulation. I should be buying fuel between N650, N750, and N800 per litre. But if any of them fizzles out, be ready to buy at over N1000 per litre again,” he cautioned.
The recent price reductions by NNPCL and Dangote Refinery have sparked a fresh price war in Nigeria’s fuel market, raising hopes for more affordable petrol prices. However, Alaje’s analysis underscores the need for a balanced and competitive market to ensure long-term benefits for consumers.
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