Forex Demand May Drop As Refineries Get Set to Resume Operations
- The pressure on the Central Bank of Nigeria (CBN) to devalue the naira due to dwindling foreign exchange reserves, is likely to ease with the resumption of operations of the Port Harcourt and Warri refineries, according to THISDAY’s investigations.
- The paper suggest this is on the back of a status report on the plants that will be presented by the managing directors of the refineries will today to the management of the Nigerian National Petroleum Corporation (NNPC).
- NNPC operates three refineries with a combined capacity of 445,000 barrels per day (bpd). They are the 210,000bpd Port Harcourt refinery, the 125,000bpd Warri refinery and petrochemical plant, and the 110,00bpd Kaduna refinery and petrochemical plant.
- The commencement of operations at the Port Harcourt and Warri plants, will boost the country’s local refining output and reduce the volume of petroleum products imported into the country, thus easing pressure on the naira and foreign exchange demand by at least 50 to 60 per cent.
- According to CBN data, fuel imports alone account for 35 per cent of forex demand in the market. Officially, the Petroleum Products Pricing Regulatory Agency (PPPRA) puts Nigeria’s consumption of petrol at 40 million litres daily.
- Source Thisday