Lagos, Nigeria – 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 war between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL) continues. Alaje made this statement during a Channels Television interview on Tuesday, monitored by DAILY MENTOR.
Alaje emphasized that the competition between Dangote Refinery and NNPCL is beneficial to Nigerians, as it drives down petrol prices. However, he warned that the collapse of either entity could lead to a significant price hike, potentially pushing petrol prices above N1,000 per litre.
“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 stated.
He further explained that the coexistence of Dangote Refinery and NNPCL is crucial for maintaining a competitive market. “In the beginning, when you have two major giants, Dangote and NNPCL, all of these are important. 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.”
Alaje stressed the importance of increasing the number of refineries in Nigeria to foster competition and stabilize petrol prices. “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 N1,000 per litre again,” he added.
DAILY MENTOR reports that the recent petrol price reductions by NNPCL and Dangote Refinery have sparked a fresh price war, offering relief to Nigerians amid rising economic challenges. Stakeholders are hopeful that the competition will lead to sustained price reductions, benefiting consumers and boosting economic activities across the country.