Alhaji Aliko Dangote, President and Chief Executive of the Dangote Group, has urged the Federal Government to completely eliminate fuel subsidies, stating that the move would allow for accurate tracking of petrol consumption in Nigeria.
This request was disclosed in an interview with Bloomberg Television in New York on Monday by Dangote, he highlighted that his $20 billion refinery, located in Lagos, has commenced fuel production and can refine 650,000 barrels of crude oil per day.
According to him, the removal of subsidies would not only facilitate transparency but also help the government save money, particularly by curbing inflated prices.
He also remarked that the refinery’s production will make it possible to account for the actual volume of gasoline consumed, currently estimated at 60 million litres daily by some sources.
“By producing locally, everything can be counted and accounted for,” he said, emphasising the potential benefits of fuel subsidy removal.
Furthermore, Dangote explained that ending fuel imports would significantly reduce pressure on Nigeria’s currency, the naira.
He noted that approximately 40% of Nigeria’s foreign exchange reserves are spent on importing petroleum products, a strain that his refinery’s production could alleviate.
“Fuel from our refinery can help stabilise the naira,” he said, adding that the refinery started supplying gasoline to the state-owned Nigerian National Petroleum Company Limited (NNPCL) on September 15.
Although President Bola Tinubu had initially removed the fuel subsidy upon taking office in May 2023, the decision was quickly reversed following a spike in inflation and protests.
Dangote reiterated that the decision to remove subsidies depends solely on the government but stressed that doing so would be a significant step to resolving economic challenges.
Dangote further revealed that his company owns two oil blocks in the upstream sector, with production set to commence next month.
He expressed pride in overcoming the challenges faced during the refinery’s construction, including a five-year delay and a $2.4 billion loan.
Addressing a recent pricing disagreement with NNPCL, Dangote clarified that the national oil company bought fuel from his refinery at a lower cost than its imported stock.
He suggested that the government could implement a basket price for fuel or eliminate subsidies altogether.
