The President of Dangote Group, Aliko Dangote, has voiced his support for the removal of petrol subsidies in Nigeria, stating that it is the right time for such action.
In an interview with Bloomberg Television on Monday, the business magnate expressed his views on the controversial issue that has long plagued Nigeria’s economy.
“I think it is the right time to get rid of subsidy because all countries have gotten rid of subsidy,” Mr Dangote said, emphasizing the need for Nigeria to align with global trends in energy policy.
Dangote argued that subsidy removal would bring transparency to Nigeria’s fuel consumption figures and help reduce unnecessary government expenditure.
He pointed out the challenges associated with subsidies, saying, “Subsidy is a very sensitive issue. 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.”
The billionaire businessman highlighted how his 650,000 barrels per day Dangote Petroleum Refinery could play a crucial role in resolving these issues.
“This refinery will resolve a lot of issues out there, you know. It will show the real consumption of Nigeria, because, you know, nobody can tell you. Some people say 60 million litres of gasoline per day. Some say, it’s less,” Dangote explained.
He further elaborated on how the refinery’s operations could aid in accurate fuel tracking: “We are going to put a tracker on them to be sure they are going to take the oil within Nigeria, and that, I think, can help the government save quite a lot of money.”
Addressing the economic implications of subsidies, Dangote stated, “Our price of gasoline is about 60 per cent the price of our neighboring countries and we have porous borders, so it is not sustainable. Government cannot afford the amount of subsidies we are paying.”
While acknowledging that his company needs to make a profit, given the $20 billion investment in the refinery, Dangote made it clear that the decision to remove subsidies ultimately rests with the government.
“The removal of subsidy is totally dependent on the government, not on us. We cannot change the price but I think the government would have to give up something for something,” he said.
The debate over petrol subsidies has been ongoing in Nigeria, with President Bola Tinubu announcing their removal in his inaugural address on 29 May 2023.
However, the government later partially reintroduced subsidies to keep pump prices stable amidst currency fluctuations and rising global oil prices.
This stance has been met with skepticism from various quarters. Former Kaduna State governor Nasir El-Rufai pointed out the existence of a form of subsidy, while the International Monetary Fund (IMF) reported that Nigeria had indeed reintroduced petrol subsidies.
The government’s position remains unclear, with Minister of Budget and Economic Planning Atiku Bagudu insisting that subsidies have been scrapped, while reports suggest otherwise.
A draft report of the Accelerated Stabilisation and Advancement Plan (ASAP) presented to President Tinubu projected fuel subsidy costs to reach N5.4 trillion by the end of 2024.
