Aliko Dangote, President and CEO of Dangote Group, has called on the Federal Government to completely eliminate fuel subsidies. Speaking in an interview with Bloomberg Television, Dangote emphasized that now is the right time to end the subsidies, which have cost the nation trillions of naira.
Dangote highlighted that the removal of subsidies would help reveal the true consumption of fuel in Nigeria. This suggestion follows the recent commencement of petrol lifting from the Dangote Refinery, with prices reaching ₦950 per litre in Lagos and over ₦1000 in northern regions.
He explained that local fuel production from his refinery could ease pressure on the naira. He also confirmed the ownership of two oil blocks in the upstream sector, with production expected to begin next month.
“Subsidy is a delicate issue. When the government subsidizes, prices get inflated, leading to unnecessary spending. It’s time to move away from subsidies,” Dangote said. He added that the Dangote Refinery would address many challenges by providing a clearer picture of Nigeria’s actual fuel consumption, allowing for better tracking and management.
Despite ongoing conversations about subsidies, Dangote stressed that his refinery’s operations would continue regardless. “We have the option to produce, sell locally, or export. We’re a private company, and while profit is important, the decision to remove subsidies lies with the government, not us.”
He also shared insights into fuel pricing disagreements with the Nigerian National Petroleum Company Limited (NNPCL), clarifying that NNPCL purchased fuel from Dangote Refinery at a cheaper rate than their imported fuel. However, NNPCL set a uniform price for both, creating some confusion in the market.
The naira, which has lost about 70% of its value since the currency peg was removed, remains under pressure, largely due to the cost of petroleum imports, which consume around 40% of Nigeria’s foreign exchange. Dangote believes that local fuel production from his refinery could help stabilize the naira by reducing this burden.
Dangote also revealed that the first crude oil deliveries to his refinery would begin in October, with 12 million barrels expected that month. This move, he explained, will alleviate 40% of the pressure on the naira by reducing the demand for foreign exchange used in fuel imports.
As discussions with the government continue, Dangote expressed confidence that an agreement would be reached soon, benefiting both the nation and the Dangote Refinery. “It’s a win-win situation for everyone involved, and it will significantly help the country,” he concluded.
