CBN: How Dangote’s Fuel Production Could Lower Food Prices

CBN: How Dangote’s Fuel Production Could Lower Food Prices 

The Central Bank of Nigeria (CBN) has expressed optimism that the operation of the newly launched Dangote Refinery will lead to a reduction in food costs in Nigeria in the short to medium term. During a press conference following the 297th Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Olayemi Cardoso stated that the refinery’s production would lower transportation expenses, positively impacting food prices……CONTINUE READING 

Cardoso noted that the refinery’s operations would also alleviate foreign exchange pressures, contributing to enhanced external reserves. He emphasized, “The committee is confident that the availability of refined petroleum from Dangote Refinery will help decrease transportation costs, which in turn will relieve food price pressures in the near future.”

Furthermore, he highlighted that reduced demand for imported refined petroleum products would have beneficial effects on external reserves and the overall balance of payments. However, he acknowledged potential risks to food inflation, including flooding, rising energy prices, shortages of Premium Motor Spirit (PMS), and security issues in agricultural areas.

Recognizing the significant role of food in the Consumer Price Index (CPI), the MPC members appreciated the Federal Government’s efforts to address insecurity in farming regions and urged continued commitment. They also commended the government’s initiatives to close the supply gap through duty-free imports of food commodities.