Aliko Dangote, the president of Dangote Group, has called on the Nigerian government to completely eliminate fuel subsidies. In a 26-minute interview with Bloomberg Television in New York on Monday, Dangote emphasized that ending subsidies would allow for a more accurate assessment of Nigeria’s actual fuel consumption and reduce unnecessary government spending.
He also mentioned that his company holds two oil blocks in the upstream sector, with production expected to begin next month. Dangote’s $20 billion refinery in Lekki, Lagos, with a capacity of 650,000 barrels per day, is expected to address several issues facing the Nigerian oil sector.
Dangote highlighted the inefficiencies caused by fuel subsidies, stating that they often lead to inflated prices and government overspending. He believes now is the right time for the subsidy to be removed. The refinery will help determine Nigeria’s real fuel consumption and ensure transparency in fuel distribution.
“We are planning to track all shipments from our refinery to ensure that they are destined for local consumption,” Dangote said, adding that this will help the government save a significant amount of money.
While Dangote’s refinery has the option of selling fuel domestically or exporting it, he clarified that the decision to remove the subsidy lies entirely with the government. He acknowledged that his refinery cannot directly influence fuel prices but believes that the government will eventually have to eliminate the subsidy.
In May 2023, President Bola Tinubu announced the full removal of fuel subsidies, leading to a sharp increase in fuel prices. The Nigerian National Petroleum Company (NNPC) Limited has since raised fuel prices further, with current rates ranging between N950 and N1,019 per litre, amid concerns that prices could reach N1,200 to N1,300 per litre.
Dangote noted that fuel imports have played a significant role in the naira’s depreciation, which his refinery could help stabilize by reducing Nigeria’s reliance on imported fuel. He estimated that petroleum products account for about 40% of Nigeria’s foreign exchange consumption.
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