Aliko Dangote, President and CEO of Dangote Group, has reiterated his call for the Nigerian government to abolish fuel subsidies, stating that the move would expose the country’s actual petrol consumption and save billions in unnecessary expenditure.
In an exclusive 26-minute interview with Bloomberg Television, the billionaire industrialist explained that removing the subsidies would not only reveal Nigeria’s true petrol consumption but also curb inflated prices that burden the national budget.
Dangote also disclosed that his $20 billion Lagos mega refinery, which can process 650,000 barrels of crude oil daily, is now supplying gasoline to the Nigerian National Petroleum Company Limited (NNPCL). He projected that the refinery’s production would ease the pressure on the naira, which has lost around 70% of its value since currency controls were loosened in 2022.
“Subsidy is a very sensitive issue,” Dangote remarked. “When you subsidise, people inflate prices, and the government ends up paying more than necessary. It’s the right time to get rid of subsidies.”
Fuel production at the Dangote refinery, which began supplying the NNPCL on September 15, represents a critical step in reducing Nigeria’s dependence on imported petroleum products. With oil imports consuming around 40% of the country’s foreign exchange reserves, Dangote believes that domestic refining will significantly stabilise the currency and alleviate economic pressures.
The removal of subsidies has been a contentious issue in Nigeria. President Bola Tinubu scrapped the subsidy upon assuming office in May 2023, sparking a cost-of-living crisis and public protests, before reinstating it amid inflation concerns. However, the Nigerian government has been easing price caps on fuel, moving cautiously towards a full deregulation of the market.
Dangote further revealed that he owns two oil blocks in the upstream sector, with production expected to commence next month, adding to his growing energy empire. Reflecting on the refinery’s progress, he expressed pride in overcoming a five-year delay and financing hurdles to bring the project to fruition.
With the refinery expected to cut Nigeria’s petrol imports, Dangote is optimistic that the end of subsidies will benefit both the government and the broader economy. “It’s a win-win situation,” he said, “removing 40% of foreign exchange pressure will stabilise the naira, and the government will finally see what it’s paying for.”
The Nigerian government is now working with Dangote to ensure proper infrastructure for transporting fuel, including a proposed tanker park to prevent damage to newly constructed roads, signalling the beginning of a new era in the nation’s energy sector.
