By Chinedu Obike

Contrary to expectations, the commencement of the Dangote Refinery, may not lead to a significant reduction of the price of petrol in Nigeria.

The Minister of Finance, Mrs. Zainab Ahmed, who made the revelation in Abuja, ascribed it to the fact that the refinery, when operational, will sell its products at the international market price because of its location in the Export Processing Zone of Lagos.

Mrs. Zainab Ahmed, Minister of Finance

She said Nigeria, like everyone else, will buy at the prevalent international market price from the refinery, but would not have to pay shipping costs because the facility is based in the country.  That, on its own, she argued, would not be enough to bring down the price of fuel.

Mrs. Ahmed, however, justified the deregulation of the petroleum sector because of its positive impact on the economy. Though it triggered a sudden hike in the price of fuel, she said the policy would encourage investments in refineries, create employment opportunities and ensure availability of the products at the filling stations.

The Minister urged investors to take advantage of the thriving environment to set up refineries because most of the ones in the country “are old and even if we turn them around, we will not be able to operate them at optimal capacity. So, while the NNPC is trying to rehabilitate them, we also need to encourage the private sector to come on stream.”

Dangote Refinery, which has the capacity to refine 650,000 barrels of crude oil per day, is expected to begin operations in 2021.

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