Dangote Refinery To Reduce Food Prices – CBN

The CBN believes that as petroleum products begin to be lifted from the newly launched Dangote refinery, transportation costs will reduce, which should lead to reduction in food prices.

The Central Bank of Nigeria (CBN) has shared its expectations that the Dangote Refinery’s operations will help reduce food prices in Nigeria in the near future.

The CBN believes that as petroleum products begin to be lifted from the newly launched refinery, transportation costs will reduce, which should lead to a reduction in food prices.

Speaking at a press conference after the 297th Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Olayemi Cardoso explained that the committee expects the refinery to also help Nigeria save foreign exchange. By reducing the need to import refined petroleum, the country’s external reserves will benefit.

“The committee expressed optimism that the lifting of refined petroleum products from Dangote Refinery will moderate transportation costs and significantly support the easing of food price pressures in the short to medium term,” Cardoso said.

He further stated, “This is also expected to moderate foreign exchange demands for importation of refined petroleum products, with a positive spillover on external reserves and improvement in the overall balance of payment position.”

Cardoso acknowledged ongoing challenges affecting food prices, including flooding, higher energy costs, fuel scarcity, and security concerns in farming areas. He added, “On food inflation, the upside risk remains flooding, hike in energy prices, scarcity of PMS, and most importantly, security in farming communities.”

The CBN Governor also praised the government’s efforts to improve farming security and manage food supply challenges. “Considering the weight of food in the CPI (Consumer Price Index), MPC members recognize the Federal Government’s efforts in addressing insecurity in farming communities and stressed the need to remain steadfast,” he noted.

The committee also praised the government’s efforts to solve food supply problems by allowing duty-free imports of important food items.

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