Minister of Finance, Budget and National Planning, Zainab Ahmed, has said Dangote refinery may not reduce the price of petrol significantly when it begins operations next year, as it will be selling the product at the international price.
Mrs Ahmed made this known on the Nigerian Television Authority’s Good Morning Nigeria programme monitored by our correspondent.
“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 where fuel was controlled,” she said.
“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.”
She noted that components like landing cost, labour cost and the margin added by marketers, all of which are factored into petrol price before Dangote refinery comes on stream, would still be in place when it starts operations.
The only difference will be the removal of shipping cost, meaning Nigerians will pay about the same price for petrol when the refinery starts work as they paid before its operation.
Located in the Lekki Free Trade Zone in Lagos, the refinery with a capacity to process 650,000 barrels of oil per day is expected to meet local demand as well as produce a surplus for export.
She affirmed that the deregulation of the petroleum industry, which triggered the latest hike in pump price, was favourable to the economy given that it would boost investment in refineries.
“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.
“Those refineries 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 refineries to come on stream and even state governments that have the capacity,” she added.
Granted that setting up the Dangote refinery may not make fuel (petrol and products) cheaper, may it be hoped however, that with time, they aim to make it cheaper for the populace. Every Nigerian has a right to enjoy some comfort from the produce of the land.
Shalom.