The ongoing price competition between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL) could drive the price of petrol down to between N650 and N800 per litre, according to financial analyst and Chief Economist at SPM Professionals, Paul Alaje.
Speaking in a Channels Television interview on Tuesday, Alaje emphasized that sustained competition between the two entities benefits Nigerians. However, he warned that if either Dangote Refinery or NNPCL fails to sustain operations, fuel prices could skyrocket beyond N1,000 per litre.
“If there is more competition, capitalists will keep reducing petrol prices as they seek to maximize profit. Nigerians should welcome their competition. The real danger lies in any form of price-fixing agreement,” he said.
He further stressed that Nigeria must encourage more refineries to enter the market, ensuring a healthy competitive environment.
“The risk is that if NNPCL collapses, consumers will be left at the mercy of a pure capitalist structure. On the other hand, if Dangote Refinery exits, we are back to heavy dependence on imports. More industry players are needed to stabilize prices,” Alaje explained.
The recent petrol price cuts by both NNPCL and Dangote Refinery have intensified market competition, fueling speculation that prices may continue to decline
