Partner With Dangote To Reduce Petrol Price, Economist Tells FG

Dr Paul Alaje, Chief Economist at SPM Professionals, has urged the Federal Government to work with Dangote Petroleum Refinery to mitigate the impact of rising fuel prices on Nigerians amid the ongoing Iran–US conflict.

Alaje issued the recommendation on Monday during his appearance on Channels Television’s The Morning Brief, where he discussed the economic challenges caused by the ongoing conflict.

According to him, restoring the price of Premium Motor Spirit (PMS), also known as petrol, to about ₦800 per litre as was the case before the conflict intensified would significantly ease the burden on citizens.

“Before the war, Dangote Refinery had slashed prices to ₦800 per barrel. Now that prices are soaring, what that means is that the costs of living will keep soaring, and food prices will escalate.

“We have seen governors such as Seyi Makinde announcing some sort of ₦10,000 support. It’s something, even though relatively small. We encourage other states to do the same.

“What we should do is partner with Dangote. What was the cost of crude to Dangote before the war? Can we maintain that price as a subsidy to Nigerians? And then instruct that for everybody who is buying from Dangote, there should be a specific price at which the products should be sold.

“We can now deliberately reduce oil theft, which is a gap nobody wants to talk about. Can we deliberately stop oil theft, even if it is just for this period that everybody is going through hardship? Then take all of those crude and give them to Dangote for refining so that prices can go back to what they were before the war?”

His comments come as global oil markets react to heightened tensions in the Middle East, with the conflict entering its fifth week and raising fears of a broader regional crisis.

The situation escalated further after Yemen’s Houthi rebels reportedly launched attacks on strategic sites in Israel, heightening concerns over disruptions to key oil routes, including the Strait of Hormuz.

The developments have pushed crude oil prices higher, with Brent crude rising to about $110 per barrel and nearing $117 at some points, its highest level in weeks. Analysts warn that continued escalation could further tighten global supply and drive prices even higher.

Alaje warned that continued conflict could push petrol prices in Nigeria above ₦1,500 per litre, further driving up inflation and living costs.

“What we know now is that America has said it is making efforts to talk with Iran on how to end the war.

“But whether that will be the case is another kettle of fish. The war is still ongoing, and the price of Brent crude is climbing to about $110 per barrel.

“If it gets to $120, one of the implications is that Nigerians will be buying PMS above $1,500 per barrel, approximately N1,600. That also has an implication that will double the cost of transportation before the pre-war period.

“So, do I think the war will stop soon? I hope it stopped yesterday. But with the activities I see around the Middle East, I doubt. President Trump has even said that they don’t even know who they are talking to.

“This war has major implications for gas supply. Just yesterday, we saw what we can call a notable delay of flights from Nnamdi Azikiwe International Airport to other airports. It blamed the delay on operational reasons, but data aggregation noted that Jet-A1 rationing may be one of the reasons for the delay.

“So the war is already affecting everyone. But if the war prolongs and the US targets the Iranian oil, Nigerians should be ready to pay more for diesel. It will grow more from what it is now to about N2,000 per litre.

“That means you will pay more for production, pay more for finished goods, and the one we are importing will get hit by global inflation”, he said.

He further warned that the inflation rate, as reported by the National Bureau of Statistics, could rise to around 16 per cent in February due to the ripple effects of the conflict.

“Already, we should expect the war to have an impact on the inflation rate for February, which we should expect to be about 16 per cent above what was reported in January, slightly above 15 per cent, and prices of commodities have started going up”, he said, adding that the government needs to introduce more economic reforms.

Alaje called for broader structural reforms across key sectors of the economy, including energy, agriculture, transportation, and oil and gas, to strengthen resilience and boost productivity.

The Nigerian government needs to come up with reforms, not just subsidy removal, unification of the naira, and tax reforms.
“We now need reforms in industrial output to target major improvements in output. We need major reforms on energy- that is, electricity supply, and of course, major reforms on Agriculture.

“And if I can anchor it, we need major reforms on the railway- voting more money to it and connecting it to farms and city centres where major consumption takes place, and even to industrial centres.

“We also need reforms in the oil and gas sector. We can’t make gains if we do less than 2 million barrels per day. We should be doing about 60 million barrels”, he said.