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Nigeria to save huge forex from fuel imports as Dangote Refinery to sell petrol in naira~Emefiele

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Nigeria will be saving huge foreign exchange on fuel imports when Dangote Refinery commences operations hopefully by the first quarter of 2022  as the company has agreed to sell petrol to the country in local currency.

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, who disclosed this while on a tour of the petrochemical plant in the Lekki area of Lagos, noted that Dangote Refinery has reached an agreement with the state-owned energy firm to sell refined petrol in naira.

According to Emefiele, Dangote Refinery, solely owned by the richest man in Africa, Aliko Dangote can buy its crude oil in naira, refine it and produce it for local consumption in naira.

“Based on agreement and discussions with the Nigerian National Petroleum Corporation (NNPC) and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira.

“That is the element where foreign exchange is saved for the country becomes very clear.

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“We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.

“This will make the price of our petroleum products cheaper in naira.

“If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.

“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Emefiele said.

He said the first shipment of urea from the Dangote Fertiliser Plant would begin in March this year to help boost agriculture in the country.

“I am saying that by this time next year, our cost of import of petroleum products for petrochemicals or fertiliser we will be able to save that which will save Nigeria’s reserve,” Emefiele said.

“It will help us so that we can begin to focus on more important items that we cannot produce in Nigeria today.”

Emefiele disclosed that the CBN gave a N100 billion intervention to the projects, adding that the apex bank is ready to support Nigerian businesses.

In its Article IV report on Nigeria’s economy, the International Monetary Fund (IMF), projected that Dangote Refinery would provide an elixir for the country’s economy when it is completed and start production by 2022.

The IMF said Dangote Refinery has “the potential to catalyze more domestic crude oil production and boost GDP growth.”

“On the upside, the Dangote refinery, if commencing production in 2022 as planned, could meet the full demand for domestic consumption of refined petroleum products—which are almost all imported at present—thereby improving the CA (Current Account) balance.

“With crude oil for local refining not subject to the OPEC quota, the refinery also has the potential to catalyze more domestic crude oil production and boost GDP growth,” the IMF wrote in the report.

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