The much anticipated Dangote Refinery will sell products at international prices and not necessarily cause a fall in the price of petrol.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this on NTA’s ‘Good Morning Nigeria’ programme on Monday, which was monitored by DailyTiz correspondent.
According to Ahmed, the refinery will sell at international rates because it is located at the Export Processing Zone in Lagos State.
She added that the only thing Nigeria would not need to pay is shipping cost.
Hé 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.”
The Finance Minister, however claims that the deregulation of the oil sector will lead to the increase in petrol price but is good for the economy as it would encourage investments in refineries.
Ahmed stated, “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.”
The Dangote refinery is expected to commence operations in 2021 with a capacity of refining 650,000 barrels of crude oil per day.