Dangote Refinery And The Legal Test For Predatory Pricing: Key Considerations

Dangote Refinery's recent strategic reduction in the price of petrol to ₦699 per litre raises significant legal questions as to whether this price point meets the legal requirements for the offence of predatory pricing. In the realm of competition law, predatory pricing is an illegal business strategy whereby a dominant operator intentionally reduces prices, often below the cost of production, with the goal of eliminating competitors from the market or preventing the expansion of competitors or entry of new competitors. While low prices are generally celebrated as pro-consumer, competition law draws a careful distinction between aggressive competition on the merits and exclusionary pricing by a dominant firm.