Water allocation approach is of crucial importance. The question therefore is: should it be a matter of centralised allocation, or competitive market is the better option? Despite the roots of this question in the history of economics, it remains a topic of interest to researchers specialising in the water market. In certain instances, this has resulted in a division of opinion among experts in the water sector. The present article, whilst formulating the problem from an economic perspective, examines the impact of altering the structure of the water market on demand, from a strong concentration to a competitive market. The research method employed reproduces the theory of microeconomic optimisation and the allocation of markets, with a focus on water as an economic good. The findings indicate that within a theoretical framework grounded in a select set of assumptions, a restructuring of the existing structure, characterised by a transition from a state of pronounced concentration and regulation to a competitive environment predicated on price discovery, is unlikely to engender an unambiguous and irrevocable impact on water demand. The final result is influenced by two key factors: the characteristics of the centralized system and the reliability of the assumptions selected during implementation. In the event of the centralized institution adopting a protective (water-friendly) approach, the results obtained are entirely different from those obtained from a strong suppression (water-hostile) approach.