The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has revealed that when Dangote Refinery begins its operation in 2021, it may not significantly reduce petrol price because the refinery will be selling at the international price.
Mrs Ahmed who disclosed this on NTA’s ‘Good Morning Nigeria’ programme on Monday, September 14, said this is because the refinery is located at the Export Processing Zone in Lagos State.
According to her, the only difference in price would be as a result of shipping costs which won’t be applicable to the refinery in Nigeria.
The Minister 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.”
She added, “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.”
Mrs Ahmed opined that the deregulation of the oil and gas sector was good for the economy. According to her, more people will be encouraged to invest.
She said, “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.