Alhaji Aliko Dangote, President and CEO of Dangote Group, has urged the Federal Government to completely eliminate Petrol subsidies. He argued that removing these subsidies would help accurately gauge petrol consumption in Nigeria and alleviate pressure on the naira. With his $20 billion mega refinery in Lagos, capable of refining 650,000 barrels of crude oil daily, Dangote believes his venture will significantly benefit the country’s economy.
In an interview, Dangote emphasized that subsidies lead to inflated prices, causing the government to overspend. He pointed out that his refinery’s production will offer clear consumption data by tracking oil movements within Nigeria, potentially saving the government substantial funds.
Despite initial delays and challenges since the project’s launch in 2013, Dangote expressed pride in its progress. He noted that Petrol subsidy removal relies on government action, and while his refinery can choose to either export or sell locally, profits are necessary to justify the $20 billion investment.
Since President Bola Tinubu took office in May 2023, the issue of Petrol subsidy has been contentious. While attempts to remove subsidies sparked protests, the measures were reintroduced due to rising inflation. Nigeria’s dependency on imported petroleum products, combined with the steep cost of fuel subsidies ($10 billion in 2022), underscores the urgency of reform.
Dangote highlighted that imported petroleum products consume about 40% of Nigeria’s foreign exchange. By supplying gasoline domestically, his refinery could stabilize the naira and reduce the pressure on the foreign exchange market.
He explained that there wasn’t significant discord with the Nigerian National Petroleum Company Limited (NNPCL) over pricing; rather, the company’s pricing announcements didn’t reflect the actual cost dynamics. Discussions are ongoing to finalize crude oil sales set to begin in October, and the deal aims to stabilize the naira by reducing demand for foreign exchange.
The government is also addressing logistical challenges related to tanker traffic around the refinery. Land has been allocated for building a dedicated park for fuel tankers to prevent road damage. Meanwhile, several road projects have been approved to enhance transportation infrastructure across different states.
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