President and Chief Executive of Dangote Group, Alhaji Aliko Dangote, has stated that the federal government is still paying subsidy on petrol.
He said it was imperative for the government to end the fuel subsidies completely, as doing so would help determine the actual petrol consumption in the country.
Dangote stated this in an interview with Bloomberg Television in New York.
He noted that fuel production from his 650,000 barrels a day refinery in Lagos will help ease pressures on the naira.
“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…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,” he stated.
On whether the subsidy will make the refinery viable, Dangote said, “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.”
President Bola Tinubu removed the subsidy when he took office in May 2023, exacerbating a cost-of-living crisis that sparked protests, but quickly reinstated it as inflation spiked.
Another step to ending it was taken in early September when the gasoline cap was eased — though the price remains below the market level.
“Petroleum products consume about 40 per cent of our foreign exchange,” Dangote said, adding that fuel from his refinery, which started supplying gasoline on September 15 to the state-owned oil company for domestic sale, “can actually stabilise the naira.”
Meanwhile, Dangote confirmed the ownership of two oil blocks in the upstream sector with an expected production date of next month.
