Paul Alaje, a financial analyst and Chief Economist at SPM Professionals, has indicated that the price of Premium Motor Spirit (petrol) could decrease to between N650 and N800 per litre if the ongoing price competition between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL) persists.
In an interview with Channels Television on Tuesday, which was reported by DAILY POST, Alaje highlighted the potential risks if the price rivalry between Dangote Refinery and NNPCL does not continue.
His comments came in response to the recent reductions in petrol prices by both NNPCL and Dangote Refinery.
Alaje emphasized that the current coexistence of Dangote Refinery and NNPCL is advantageous for Nigerians. He cautioned that the failure of either entity could pose significant challenges for the populace and underscored the necessity for additional refineries in Nigeria.
“Increased competition driven by capitalists seeking profit will likely lead to a continued decrease in petrol prices if they fail to reach an agreement. Nigerians should welcome this lack of consensus. Once an agreement is established, prices can be set. The reality is that you and I may have limited choices.
Initially, with two major players like Dangote and NNPCL, this situation is crucial. The risk arises if NNPCL were to disappear, leaving us with a purely capitalist environment, which could have serious consequences. If Dangote Refinery were to shut down, we would find ourselves in a situation similar to Egypt. It’s essential to have more participants in the market.
We actually desire more competition, as this is a natural outcome of deregulation. Ideally, I should be paying between N650 and N800 per litre for fuel. However, if either of these companies were to falter, we could see prices soar back to over N1000 per litre,” he stated.
The recent drop in petrol prices by NNPCL and Dangote Refinery has ignited a new price war.
