The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said when Dangote Refinery kicks off next year, it may not significantly reduce the price of petrol because the refinery will be selling at the international price.
Ahmed said this is because the refinery is located at the Export Processing Zone in Lagos State.
The minister said this on NTA’s ‘Good Morning Nigeria’ programme.
She said the only thing Nigeria would not need to pay is shipping cost.
Zainab said, “What we are doing is enabling the petroleum sector to actually grow. There have been a number of refineries that have been licensed for several years. None of them was willing to start refining under the regime that we had were fuel was controlled.
“The Dangote refinery is sitting within an Export Processing Zone so they are insulated from that. When we buy fuel from Dangote, we will be buying fuel at the international market price. The only savings that we will be making is the savings of freight which is shipping.
“But we will still have landing cost; labour cost and the marketers will still have to put a margin. These refineries being those that are supposed to have come to operate can now come in because they are assured that when they produce, they can sell at market rate and recover their investments and make some reasonable profits.”
She said the deregulation of the sector which led to the increase in petrol price was good for the economy as it would encourage investments in refineries.
Ahmed added, “It will mean more refineries will open, they will employ people and fuel will be available in different parts of the country and not just relying on the government refineries.
The Dangote refinery is expected to commence operations next year with a capacity of refining 650,000 barrels of crude oil per day.