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Zainab Ahmed, Minister of Finance, has opined that Dangote Refinery which is projected to begin operation in 2021 may not essentially reduce the price of fuel in the country as most analysts have claimed.
Ahmed explained that the refinery is sitting within an export processing zone, hence it is expected to refine the petroleum product and sell at international market rate.
The Finance Minister stated this when she featured in an interview with the Nigerian Television Authority (NTA).
“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,” 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.
“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.”
Ahmed further explained that while deregulation of the downstream end of the petroleum sector will remove reliance on the government for the supply of the product, it will propel investors to build more refineries, employ people and ensure its availability in different parts of the country.
