Aliko Dangote, President and CEO of Dangote Group – owners of the Lagos-based Dangote Refinery, has called on the Federal Government of Nigeria to end fuel subsidies. In a recent Bloomberg Television interview, he said the subsidy regime has cost the country untold fortunes by hindering accurate measurement of consumption
Dangote’s comments follow the start of petrol lifting from his new $20 billion refinery – considered one of the largest in the world. The current price of PMS ranges from ₦950 per liter in Lagos to above ₦1000 in other parts of the country. He also believes that fuel production from his refinery will ease pressure on the Naira – Nigeria’s local currency, by taking off 40% of forex demand usually used to fund fuel imports.
“Subsidy is a very sensitive issue”, he admitted. “Once you are subsidizing 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.”
Dangote also mentioned that his refinery will help determine Nigeria’s actual fuel consumption by tracking trucks and ships loading from the refinery. This transparency could save the government significant funds.
Regarding whether subsidy removal benefits his refinery, Dangote replied, “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.”
Dangote revealed that the Nigerian National Petroleum Company Limited (NNPC) bought fuel from his refinery at a cheaper price than imported fuel but announced a uniform price for all products. He clarified that discussions are ongoing to finalize a detailed agreement on crude oil sales starting in October, which will be priced in Naira to help stabilize the currency.
President Bola Tinubu removed the subsidy in May 2023, causing inflation to spike to 34% in 2024 before dropping to 32.15% in August. The Naira has also taking a 70% hit against the dollar since currency controls were relaxed last year.
You can watch the full interview on the features window at the top of this page.
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