A financial analyst, Paul Alaje, has predicted that the price of petrol (Premium Motor Spirit, PMS) could fall to between ₦650 and ₦800 per litre if the ongoing price war between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL) continues.
Alaje, who is the Chief Economist at SPM Professionals, made this statement during an interview on Channels Television on Tuesday, he explained that competition between Dangote Refinery and NNPCL is beneficial to Nigerians but warned that if one of them dominates the market, it could lead to higher prices in the long run.
What Happens If One Refinery Takes Over?
Alaje stressed that Nigerians should be happy that Dangote and NNPCL are competing rather than working together to fix prices.
“When you have two major players, Dangote and NNPCL, competing, it’s good for Nigerians. The problem comes if one of them collapses. If NNPCL goes out, you’ll be left with a private monopoly, and you don’t want to imagine the consequences. If Dangote Refinery stops operating, then we are back to square one, importing fuel as before. We need more players in the market to drive down prices,” he said.
According to him, the price of petrol could remain between ₦650 and ₦800 per litre if competition continues. However, if either Dangote Refinery or NNPCL exits the market, petrol prices could jump back to over ₦1,000 per litre.
Recent Petrol Price Drop Sparks Price War
Both NNPCL and Dangote Refinery have recently reduced petrol prices, triggering a fresh price war. This development has brought some relief to consumers, but analysts warn that sustained competition is needed to keep prices stable in the long run.
With deregulation in full effect, Nigerians now depend on market forces rather than government subsidies to determine fuel prices. The coming months will reveal whether this competition benefits consumers or leads to an eventual monopoly.