President of Dangote Group, owners of Dangote Petroleum Refinery and Petrochemicals, Alhaji Aliko Dangote, has advocated total removal of fuel subsidy, saying it is no longer sustainable.
The federal government had indirectly reintroduced a subsidy on petrol, barely one year after President Bola Tinubu, during his inauguration speech on May 29, 2023, declared: “Subsidy is gone.”
In an interview on Bloomberg Television in New York on Monday, Dangote said the removal of subsidy would take care of any discrepancy in consumption figures and also help the government save money.
According to him, “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.”
Justifying his call for subsidy removal, Dangote said: “All countries have gotten rid of subsidy. Let me give you an example. Saudi Arabia used to give, what Saudis, the citizens, believe is that oil is our own God-given gift, so government shouldn’t charge us. So government was selling it at a low price.
“But today, as we speak gasoline is about 40 per cent cheaper in Nigeria than Saudi Arabia, which I think doesn’t make sense. Number two, our price for gasoline is about 60 per cent of the price of our neighbouring countries and we have porous borders. So it is not sustainable.”
He said that Nigeria cannot afford subsidy. “The amount of subsidy we are paying, the government cannot afford that kind of subsidy,” he said.
Asked if he was advocating for subsidy removal to make his refinery viable, Dangote said: “We have a choice of when we produce, we can export, or when we produce, we sell locally. We are a private company. And yes, it’s true, we have to make profit.
“We built something worth $20 billion. Definitely we have to make money. The removal of petroleum subsidy is totally dependent on the government, not on us. We cannot change the price. But I think the government should give up something for something; so I think at the end of the day, the subsidy will have to go.”
He said that the Dangote Refinery will resolve the controversy about the total daily consumption of petrol in Nigeria.
“This refinery will bring a lot of things out there. It will show the real consumption of Nigeria because nobody can tell you. Some people say 60 million litres of gasoline per day, some said it is less; but right now by us producing, everything can be counted; so everything can be accounted for,” he said.
To ensure this, Dangote said: “Most of the trucks and ships that will come and load from us, we will put a tracker on them, to be sure they are going to take the oil within Nigeria and that can help the government to save quite a lot of money.”
Dangote last week started selling its petrol in the local market.
The company was sold to the Nigerian National Petroleum Company Limited in dollars. It promised to sell to the company or any other petroleum marketer in naira from next month, when it will start using the batch of crude purchased in naira.
