The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has expressed his belief that Dangote Refinery, which is expected to be fully functional in July, will help alleviate the scarcity of foreign exchange in the country. Emefiele highlighted that local refining could save about 20% of the total cost of importing petroleum products. He, however, reiterated that it was time to exit the fuel subsidy regime.
Emefiele stated that the refinery could also be persuaded to sell foreign exchange earnings to banks at a good rate, as he spoke at the end of the 291st Monetary Policy Committee meeting in Abuja. He said the CBN would engage the promoter of the refinery, Aliko Dangote, to ensure that Nigerians benefit from the venture, which the CBN, the Federal Government, and the country helped set up.
The CBN Governor pointed out that the price of locally refined fuel would be lower than the price of imported ones since there would be no freight cost, storage, and logistics expenses. He said, “So, we will be lucky to be having about 20% savings from refining locally, rather than importing. The important thing is that we have reached a point, whether we like it or not when we must exit the subsidy.”
Furthermore, Emefiele revealed that Dangote predicts that any excess fuel beyond local consumption would be exported according to their agreement, and Nigeria could save “-close to about $5 billion to $10 billion in foreign exchange that will come into the country.” He assured that the CBN would ensure that Dangote Refinery sells dollars to banks at a good market rate.
The Dangote Refinery started Test Run Operations in 2020, which initially took place at the beginning of 2022. The Petroleum Industry Bill (PIB), which included the deregulation of petroleum products’ prices, was passed in early 2022.
