September 24, 2024 – The Central Bank of Nigeria (CBN) has projected that fuel production from the recently launched Dangote Refinery will contribute to lowering food prices across the country in the near future.
During a press conference following the 297th Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Olayemi Cardoso outlined how the refinery’s operations are expected to impact the economy. “The committee is optimistic that as the Dangote Refinery begins supplying refined petroleum products, we’ll see a reduction in transportation costs. This, in turn, should significantly ease pressures on food prices in the short to medium term,” Cardoso stated.
The CBN chief also highlighted potential benefits to Nigeria’s foreign exchange situation. “We anticipate a decrease in foreign exchange demands for importing refined petroleum products. This should positively affect our external reserves and improve the overall balance of payments,” he explained.
However, Cardoso acknowledged persistent challenges to food inflation, including flooding, energy price hikes, PMS scarcity, and security issues in farming areas. He emphasized the importance of the government’s ongoing efforts to address these concerns, particularly praising initiatives to improve security in agricultural regions and the introduction of duty-free import windows for food commodities.
The MPC stressed the need for continued focus on these areas, given the significant impact of food prices on the Consumer Price Index (CPI), which is used to measure inflation.
As Nigeria grapples with economic challenges, the CBN’s outlook suggests that the Dangote Refinery could play a crucial role in stabilizing key economic indicators, potentially bringing relief to consumers facing high food prices.
