An economist, Paul Alaje, has stated that the ongoing price war between Dangote Refinery and the Nigerian National Petroleum Company (NNPCL) will put an end to the abnormal profit previously enjoyed by capitalists. He emphasized that competition in the petroleum sector will drive prices down and benefit consumers.
“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 on Channels Television’s Politics Today programme on Tuesday.
Dangote’s Fuel Price Cut Forces NNPCL to Adjust Rates
On February 26, 2025, Africa’s richest man and industrialist, Aliko Dangote, slashed the ex-depot price of petrol from ₦890 to ₦825 per litre at his $20 billion Dangote Refinery. Under the new pricing, customers purchase petrol at:
- ₦860 per litre in Lagos
- ₦870 per litre in the South-West
- ₦880 per litre in the North
- ₦890 per litre in the South-South and South-East
Shortly after this adjustment, NNPCL responded by reducing its retail price from ₦945 to ₦860 per litre in Lagos, with similar reductions across other states. The move has sparked discussions about the long-term impact on Nigeria’s petroleum industry.
NNPCL Must Produce Locally to Compete – Alaje
According to Paul Alaje, the price reduction is a positive development for Nigerians. However, he warned that if the “cartel” agrees, Nigerians are in trouble, implying that lack of competition could lead to price manipulation.
He further stressed that NNPCL must shift from importing refined petroleum to local production if it hopes to compete effectively with Dangote Refinery. “The price slash is sustainable, and petrol should go below ₦700 per litre,” Alaje insisted.
Nigeria’s Refinery Crisis and Dangote’s Expansion
Nigeria, Africa’s most populous nation, has struggled with energy challenges for decades. Until 2024, all state-owned refineries were non-operational, leaving the country heavily dependent on fuel imports, with NNPCL as the primary importer.
Following the removal of fuel subsidies in May 2023, petrol prices surged from ₦200 per litre to nearly ₦1,000 per litre, worsening the economic burden on citizens. Many Nigerians rely on petrol for transportation and electricity generation due to the country’s unreliable power supply.
Dangote Refinery, which started operations in December 2024, processes 350,000 barrels per day, with plans to reach 650,000 barrels per day by year-end. Despite regulatory hurdles, the refinery has begun supplying diesel, aviation fuel, and now petrol to marketers across Nigeria.
Competition or Monopoly? The Future of Nigeria’s Petroleum Market
With Dangote Refinery and NNPCL now competing on pricing, Nigerians could see a reduction in fuel costs. However, experts warn that true competition requires multiple independent refineries to prevent market manipulation.
For now, consumers are watching closely to see if the price war between Dangote and NNPCL will bring lasting relief or lead to further power struggles in Nigeria’s oil sector.
