The Minister of Finance, Budget and National Planning, Zainab Ahmed disclosed this during an interview with the Nigerian Television Authority (NTA) on Monday, September 14, 2020.
She said Dangote may not significantly reduce the price of petrol because the refinery is located at the Export Processing Zone in Lagos State.
Mrs Ahmed said the only thing Nigeria would not need to pay is shipping cost, but the refinery will sell its products at the international market price.
“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.”
She said the deregulation of the sector which led to the increase in petrol price was good for the economy as it would encourage investments 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.
Meanwhile, the Minister of State for Petroleum Resources, Timipre Sylva, has said that the Federal Government will from October begin converting the cars and generators of Nigerians to run on gas.
The minister said the conversion will be done free of charge for all Nigerians to cushion the effect of the hike in pump price of petrol.