“Why Nigerian Govt needs to stop ‘fuel subsidy’ immediately” — Dangote

• Alhaji Aliko Dangote, has urged the Federal Government to stop fuel subsidies entirely.

• He explained that this move would help clarify the country’s real gasoline consumption.

• Dangote confirmed that his company has two oil blocks in the upstream sector, with production set to begin next month.

The President and CEO of the Dangote Group, Alhaji Aliko Dangote, has urged the Federal Government to stop fuel subsidies entirely.

He explained that this move would help clarify the country’s real gasoline consumption.

Dangote confirmed that his company has two oil blocks in the upstream sector, with production set to begin next month.

He stated that his $20 billion mega refinery in Lagos could ease pressure on the naira by producing fuel, as it has the capacity to refine 650,000 barrels of crude oil each day.

In a 26-minute interview with Bloomberg Television in New York, he asserted that it is the right moment to end fuel subsidies and noted that halting petrol imports would greatly help with currency issues.

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 reflected on the difficulties encountered after the project’s launch in 2013, which faced a five-year delay due to problems with the state government and local communities, along with a loan of $2.4 billion. He expressed personal pride in reaching this milestone.

Regarding the subsidy and its impact on the refinery’s success, Dangote stated, “We have options. We can produce and export, or we can sell locally. As a large private company, making a profit is essential. We invested $20 billion, so it’s important for us to earn 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.”

President Bola Tinubu eliminated the subsidy when he assumed office in May 2023, worsening the cost-of-living crisis that led to protests.

However, he quickly brought it back as inflation rose. In early September, another move was made to reduce the subsidy when the gasoline price cap was lifted, although it still stays below market rates.

Before Dangote’s refinery started operations, Nigeria relied entirely on imported fuel and has been cautiously trying to end its expensive fuel subsidies, which amounted to $10 billion in 2022.