Dangote Advocates for Complete Removal of Fuel Subsidies in Nigeria
Aliko Dangote, President and CEO of Dangote Group, has called on the Nigerian government to eliminate fuel subsidies entirely. His remarks come in light of recent developments at the Dangote Refinery, where petrol is now being lifted, with prices reaching ₦950 per litre in Lagos and over ₦1000 in northern regions.
During a 26-minute interview with Bloomberg Television in New York, Dangote emphasized that the removal of fuel subsidies is necessary, especially considering the significant financial burden it has placed on the nation’s economy. He explained that scrapping subsidies would also help to provide a clearer picture of Nigeria’s actual fuel consumption.
According to Dangote, subsidies have long allowed for price manipulation, forcing the government to cover excessive costs. He stated, “Subsidies tend to inflate costs unnecessarily, and the government ends up paying more than it should. The time is ripe for a complete removal.”
Furthermore, he noted that with his refinery in operation, fuel production would not only relieve pressure on the naira but also offer greater transparency regarding the country’s fuel needs. “With domestic production, we’ll be able to accurately measure consumption, as we’ll track the distribution of fuel, ensuring it’s delivered within Nigeria.This could result in significant savings for the government.”
Dangote also confirmed that his company owns two oil blocks in the upstream sector, with production expected to begin soon, adding that fuel production from his refinery will be a key factor in stabilizing the local economy.
When asked about the impact of fuel subsidies on his refinery’s operations, Dangote stated that, as a private company, profitability remains a priority. However, he emphasized that the ultimate decision to retain or remove subsidies rests with the government. “While the government must make the final call on subsidies, we, as a private business, will always prioritize making a profit. But it’s a decision for the government, and at some point, the subsidies will have to be phased out.”
Before the Dangote Refinery began production, Nigeria was heavily reliant on imported petrol. Since assuming office in May 2023, President Bola Tinubu has taken steps to eliminate fuel subsidies, a move that initially led to an inflation spike to around 34% by 2024, with a slight decline to 32.15% in August. However, food inflation continues to hover around 40%.
Dangote expressed optimism that once fuel demand is controlled domestically, it will help stabilize the naira. He also mentioned ongoing discussions with the Nigerian National Petroleum Company Limited (NNPCL) to secure an agreement that would ensure a steady supply of crude oil to the refinery.
