January 16, 2024

$20bn Dangote Refinery to boost Nigeria’s foreign exchange generation, conservation — Experts

AS the $20 billion Dangote Refinery begins operations, experts have stated that it will culminate in the boosting of Nigeria’s foreign exchange generation and conservation.

The value of Naira has fallen considerably in the past few months, due mainly to massive importation of petroleum products and other items.

But in different interviews with Vanguard, yesterday, the experts said the commencement of operations will reduce the pressure on dollars, used in importing the petroleum products, adding that the exportation of products will also assist to generate additional foreign exchange into the nation.

A Lagos-based energy expert, Yomi Sola Falana, said: “The expected exportation of the refined petroleum products by the Dangote Refinery will enhance the country’s foreign currency earnings and thus resulting in boosting Nigeria’s foreign reserves.

“Furthermore, the payment for the petroleum refined products in Nigerian Naira, will reduce the pressure on the demand for US Dollars or Euros and thus, resulting in improving the Nigerian Naira exchange rate to the foreign rate to the foreign currences.”

He said: “With the six (6) million barrels fully delivered, Dangote Petroleum Refinery has commenced production of Diesel, Aviation Fuel, and Liquefied Petroleum Gas (Cooking Gas), before subsequently progressing to the production of Premium Motor Spirit (PMS).

“The refinery petroleum product marketers are eager to know the prevailing prices fixed on those products by the Dangote Refinery. According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), it will no longer fix prices or release templates for refined petroleum products. This statement implies that the market forces would henceforth dictate prices under the liberalized markets.

“Given the fact the Dangote refined petroleum products will be produced locally, Nigerians are likely to enjoy lower prices of the products in comparison with the export prices obtained in other countries which will reflect the huge cost of transportation (Freight) and insurance.