Renowned economist, Paul Alaje, has described the ongoing price competition between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL) as beneficial to Nigerians, saying it will curb excessive profits by capitalists.
Alaje made this known on Channels Television’s Politics Today programme on Tuesday, highlighting that the rivalry would drive both companies towards neutral profits, ultimately lowering fuel prices.
“You may want to call it a price war, but in economics, when a duopoly fights, it is the best for the populace because they will drive themselves to neutral profits,” Alaje said.
The $20 billion Dangote Refinery, owned by billionaire Aliko Dangote, recently slashed its petrol ex-depot price from ₦890 to ₦825 per litre, prompting NNPCL to follow suit by reducing its retail price from ₦945 to ₦860 per litre in Lagos and other states.
According to Alaje, the absence of any agreement between both entities signals better prospects for consumers.
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He warned that any monopoly or cartel agreement would push petrol prices above ₦1,000 per litre again.
The economist further urged NNPCL to boost local production rather than relying on imported products to sustain the competition and ensure further price reductions.
Nigeria, which has battled with epileptic power supply and non-functional refineries for decades, saw petrol prices skyrocket following the removal of subsidies in May 2023.
However, the recent price cuts by both Dangote and NNPCL have offered relief to citizens battling high energy costs.
The Dangote Refinery, which began operations in December 2024, currently produces 350,000 barrels per day and is expected to hit its full capacity of 650,000 barrels per day by the end of the year.