The Central Bank of Nigeria (CBN) predicts that Dangote Refinery's petrol supply will reduce transportation costs and ease food inflation. The CBN has raised the Monetary Policy Rate to tackle rising inflation, which currently stands at 32.15%, driven by increasing food prices and energy costs.
The Central Bank of Nigeria (CBN) has announced that the distribution of petroleum products from Dangote Refinery is set to lower transportation costs and ease food inflation across the country. This development is part of the efforts to manage inflation, driven by rising food and transport expenses.
CBN Governor Olayemi Cardoso noted that the refinery’s output will help reduce the demand for foreign exchange used in importing refined fuel, potentially boosting external reserves and improving Nigeria’s balance of payments. The CBN also raised the Monetary Policy Rate (MPR) from 26.75% to 27.25%, aiming to control the inflation rate, which was recorded at 32.15% in August 2024.
The rise in inflation is attributed to increasing costs of basic food items like bread, cereals, and vegetables. With Dangote Refinery now supplying petrol, there is hope that fuel prices will stabilize, though a pricing disagreement remains between the Nigerian National Petroleum Company Limited (NNPCL) and the refinery.
As the largest refinery in Africa, Dangote Refinery is projected to reach a full capacity of 650,000 barrels per day by the end of the year. It has already begun supplying diesel, aviation fuel, and petrol, contributing significantly to Nigeria’s efforts to address its long-standing energy crisis, which non-operational state-owned refineries and heavy reliance on imported fuel have compounded.
