The Federal government says Dangote refinery which will begin operations next year will not have a high effect on fuel price because it will sell petrol at the international price.
This was disclosed by the Minister of Finance, Budget and National Planning, Zainab Ahmed while appearing alongside the Minister of State for Petroleum Resources, Timipre Sylva, on NTA’s ‘Good Morning Nigeria’ programme on Monday.
Ahmed said this was because the refinery was located at the Export Processing Zone in Lagos State.
She said the only thing Nigeria would not need to pay was the shipping cost of fuel.
The minister said the deregulation of the sector, which led to an increase in petrol price, was good for the economy as it would encourage investments in refineries.
She stated that the Nigerian National Petroleum Corporation would not be able to rehabilitate the government-owned refineries completely because they were old and there was a need to encourage private investments in refineries.
Also speaking, the Minister of State for Petroleum Resources, Timipre Sylva, said the pump price of petrol would not drop significantly even if Nigeria was refining crude oil locally.
Sylva explained that the major determinant of the cost of petrol was crude oil and as long as it remained high, the cost of petrol would not drop.
He said the only thing that could make local production cheaper was the absence of shipping cost, adding that the cost of labour would not be too different from the international standard, because local refineries would be paying expatriates.