Fuel Prices Could Soar Past N1,000/litre If Dangote, NNPCL End Price War, Expert Warns
- Dr. Paul Alaje has warned that petrol prices could skyrocket if the ongoing price competition between Dangote Refinery and NNPCL ends
- He explained that the rivalry between the petrol refiners benefits Nigerians by reducing excessive profits and keeping prices lower
- Alaje, however, argued that based on current global trends, the pump price of petrol in Nigeria should be less than it currently is
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Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology, Banking and the Economy.
Dr. Paul Alaje, Chief Economist and Partner at SBM Professionals, has said that Nigerians may have to pay more than N1,000 for petrol if the ongoing price competition between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL) comes to an end.
Speaking on Channels TV on Tuesday, Alaje supported the rivalry between the two companies, explaining that if one of them is forced out, petrol prices could rise above N1,000 per liter.
Source: UGC
Price war good for Nigerians
In recent months, both Dangote Refinery and NNPCL have been engaged in a price battle, leading to multiple reductions in petrol prices.
Alaje stated that the price competition benefits Nigerians, as both companies are cutting down what he called “excessive profits.”
He added that as long as the price battle continues, it will help Nigerians save money.
He said:
"Yes, you may want to call it a price war, but you see, in economics, when a duopoly fights, it’s the best for the populace, because they will themselves, drive themselves to neutral profit."
Alaje described neutral profit as the point when all production costs are fully covered. This includes expenses for land, rent, wages and salaries for workers, actual profit, payments to business owners, and interest on capital.
However, he cautioned that if both companies exhaust themselves in the price battle, the cost of petrol could rise again to N1,000 per liter.
He said:
“More of the competition should go on. If any of them fizzle out, be ready to buy (petrol) at over N1,000 again.”
Alaje stated that petrol prices in Nigeria are still high compared to global trends. He believes that if the companies eliminate "excessive profits," the price per liter should be between N795 and N830.
Dangote, NNPC in price war
The Dangote Refinery has been leading the way in reducing prices, with NNPCL usually following suit.
On February 26, 2025, the $20 billion refinery owned by Africa’s richest man, Aliko Dangote, lowered the ex-depot price of petrol from N890 to N825 per liter.
Shortly after, NNPCL also reduced its retail price from N945 to N860 in Lagos, with similar price cuts at its outlets across the country.
Source: UGC
In September 2024, the billionaire industrialist began operations at the refinery in Lagos, processing 350,000 barrels of crude oil per day.
After facing regulatory challenges, the refinery aims to reach its full capacity of 650,000 barrels per day by June.
Dangote’s cheap petrol draws massive queues
Meanwhile, many motorists and other petrol consumers are rushing to Dangote refinery partner stations for cheaper fuel, leading to long queues at various locations
The motorists said they were happy about the price difference, noting that saving N75 to N80 per litre was a big relief, especially for commercial drivers.
They, however, urged Dangote to expand its partner stations to include independent and major marketers, making the cheaper fuel more accessible.
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Source: Legit.ng
