Dangote Calls for End to Petrol Subsidy, Touts New Refinery as Solution
The President of Dangote Group, Alhaji Aliko Dangote, has urged the Federal Government to remove the petrol subsidy, citing the need for transparency and accuracy in determining the country’s actual fuel consumption. In an exclusive interview with Bloomberg Television in New York, Dangote expressed his concerns about the current subsidy regime, stating that it allows individuals to artificially inflate prices, resulting in the government paying more than it should.
Dangote’s proposed solution lies in his newly-built $20 billion refinery in Lagos, which he claims will revolutionize the way Nigeria imports and consumes fuel. The refinery, he explained, will enable accurate tracking of fuel consumption and eliminate the need for estimates, which often vary widely. “This refinery will show Nigeria’s accurate petrol consumption,” he said. “Now, nobody can tell you. Some people say we consume 60 million litres of gasoline per day. Some say it’s less. But right now, if you look at it by us producing, everything can be counted.”
The Dangote refinery is expected to produce a significant portion of Nigeria’s fuel needs, with the potential to reduce the country’s reliance on imported petroleum products. According to Dangote, the refinery will also help to alleviate pressure on the naira by reducing the country’s dependence on foreign exchange to import fuel. “Petroleum products consume about 40 per cent of foreign exchange,” he noted. “What that will do is that it’s going to remove 40 per cent pressure on the naira.”
While the removal of the subsidy is ultimately dependent on government decision-making, Dangote believes that it is a necessary step towards achieving energy security and fiscal sustainability. He emphasized that his refinery is not just about producing fuel, but also about creating a win-win situation for all parties involved. “We will sell in the domestic market,” he said. “The deal is to give the government something that they want. It is also a win-win situation for all and would benefit the country.”
In a related development, Dangote revealed that discussions are underway with the Nigerian National Petroleum Corporation (NNPCL) to determine the details of their agreement. He disclosed that the corporation has committed to providing his refinery with 12 million barrels of crude oil in October alone, equivalent to an average of 390,000 barrels per day.
The proposed refinery agreement has been hailed as a game-changer for Nigeria’s energy sector, with many experts predicting significant benefits for the country’s economy and energy security.
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