The President of Dangote Group, Alhaji Aliko Dangote, has called on the Federal Government to eliminate the petrol subsidy, arguing that its removal would allow for accurate measurement of the nation’s fuel consumption.
He emphasized that the ongoing subsidy has led to inflated costs, burdening the government with unnecessary expenses.
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“Subsidy is a susceptible issue. Once you subsidise, people will bloat the price, and the government will end up paying what it is not supposed to pay. It is the right time to get rid of subsidy,” Dangote said in an interview with Bloomberg Television in New York.
He also highlighted the role of his Lagos-based $20 billion refinery in alleviating pressure on Nigeria’s currency, the Naira. According to him, once the refinery becomes operational, it will provide clear data on the country’s actual petrol usage. Dangote noted that current estimates of daily petrol consumption vary, with some claiming it is 60 million litres per day, while others suggest lower figures.
“This refinery will resolve a lot of issues. It will show Nigeria’s accurate petrol consumption. Now, nobody can tell you. Some people say we consume 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,” he said.
Dangote further explained that the refinery would utilize trackers on trucks and ships to ensure petroleum products are distributed domestically, which would help save money for the government. He believes that the removal of the subsidy is inevitable, although it will ultimately be the government’s decision.
“The removal of subsidy depends on the government and not on us. We cannot change the price, but I think the government will have to give up something for something. In the end, the subsidy will have to go,” he added.
Discussing the refinery’s impact on the local market, Dangote said, “We will also sell in the domestic market. What that will do is that it’s going to remove 40 per cent pressure on the naira. Petroleum products consume about 40 per cent of foreign exchange.”
He also revealed that discussions with the Nigerian National Petroleum Company Limited (NNPCL) are ongoing to finalize an agreement. “Currently, discussions are ongoing to determine the details of the agreement. They are working out something that would be a win-win between us and the NNPCL,” he stated.
Dangote concluded by emphasizing the robust nature of the agreement, noting that it would ensure energy security through regular crude oil supply. “For example, in October, they are going to give us 12 million barrels, indicating an average of about 390,000 barrels a day,” he disclosed.
