The President and Chief Executive of Dangote Group, Aliko Dangote, has urged the Federal Government to end fuel subsidies completely.
Speaking in an interview with newsmen in New York on Monday, the time is right to end subsidies which have gulped trillions of naira from the country’s coffers.
According to him, the removal would assist in determining the country’s actual consumption.
His advice follows the recent commencement of petrol lifting from the Dangote Refinery, and price increment to ₦950 per litre in Lagos state and its environs, and above ₦1000 in the north.
He stated that fuel production from his refinery will help ease pressures on the naira, and also confirmed ownership of two oil blocks in the upstream sector with an expected production date of next month.
He said, “Subsidy is a very sensitive issue. Once you are subsidising something then people will bloat the price and then the government will end up paying what they are not supposed to be paying. It is the right time to get rid of subsidies.”
“But this refinery will resolve a lot of issues out there, you know, it will show the real consumption of Nigeria, because, you know, nobody can tell you. Some people say 60 million litres of gasoline per day.
“Some say, it’s less. But right now, if you look at it by us producing, everything can be counted. So everything can be accounted for, particularly for most of the trucks or ships that will come to load from us. We are going to put a tracker on them to be sure they are going to take the oil within Nigeria, and that, I think, can help the government save quite a lot of money. I think it is the right time, you know, to remove the subsidy.”
Dangote also spoke on whether or not the federal government retaining fuel subsidy would pan well for his refinery, “Well, you see, we have a choice of either one. We produce, we export, and when we produce, we sell locally. But we are a big private company. And yes, it’s true, we have to make a profit. We build something worth $20bn so definitely we have to make money.
“The removal of subsidies is totally dependent on the government, not on us. We cannot change the price, but I think the government will have to give up something for something. So I think at the end of the day, this subsidy will have to go.”
Nigeria had imported all petrol consumed in the country before the Dangote Refinery came onstream.
President Bola Tinubu removed the subsidy when he took office in May 2023.
The move has since jerked up the inflation rate to about 34 per cent in 2024, before declining to about 32.15 per cent in August. Food inflation remains high at about 40 per cent.
The naira has lost around 70 per cent of its value against the dollar since rules that pegged the currency at an artificially high level were relaxed last year.
The billionaire also revealed the details of the pricing disagreement that occurred with the Nigerian National Petroleum Company Limited.
He said the national oil company bought its current stock from the refinery at a cheaper price than its imported fuel but gave a uniform price for all products.
Dangote said that discussions are still ongoing and a detailed agreement will be finalised this week on the planned crude oil sales anticipated to begin in October.
