Petrol prices to crash as refineries set to begin operations - CBN governor

Cardoso made this known while speaking at the launch of the Nigerian Economic Summit Group (NESG) 2024 Macroeconomic Outlook Report in Lagos on Wednesday, January 24, 2024.

The CBN governor's remarks come barely two weeks after Dangote Refinery commenced production of diesel and aviation fuel, with petrol production set to follow suit.

Also, the government-owned Port Harcourt refinery is expected to begin production in due time, after the complementation of the first phase of rehabilitation in December 2023.

The apex bank boss explained that "The expected stabilisation or reduction in fuel costs is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience."

Additionally, he said due to the projected reduction in petroleum products imports, the country is expected to achieve stability in the foreign exchange market this year.

He also stated that the CBN will collaborate with the Nigerian National Petroleum Company Limited (NNPCL) and the Ministry of Finance to ensure that all forex inflows are returned to the apex bank to boost reserves accretion.

"These coordinated efforts will greatly enhance the bank's FX inflows and contribute to the appreciation of reserves," Cardoso said.

"The expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum products imports and the recent implementation of a market-determined foreign exchange rate policy by the CBN.

"The reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage."

Cardos, however, argued that the naira, which exchanges around ₦1,370 to the dollar at the parallel market, is undervalued.

“We believe that the naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term,” he said.