Nigeria: Dangote urges government to end fuel subsidies --[Reported by Umva mag]

He stated that doing so would allow for a clearer understanding of the country’s actual fuel consumption and confirmed ownership of two oil blocks in the upstream sector, with production set to begin next month.

Dangote noted that the output from his $20 billion mega-refinery in Lagos will help relieve pressure on the local currency, the naira, as the refinery is capable of processing 650,000 barrels of crude oil per day.

In an interview with Bloomberg Television in New York on Monday, Dangote stressed that the Nigerian government needs to end fuel subsidies immediately. According to a report from the Punch newspaper on Tuesday, he explained that eliminating fuel imports would significantly ease monetary pressures.

“Subsidies are a very sensitive issue. Once you subsidize something, prices tend to inflate, and the government ends up paying more than it should. Now is the right time to remove these subsidies,” he stated.

“The refinery will address many issues; it will provide a clear picture of Nigeria’s consumption because, currently, no one can give an accurate figure. Some say it’s 60 million liters of fuel per day, while others claim it’s less. However, with our production data, we can have accurate counts, particularly for trucks and ships that come to load from us. We plan to install trackers on them to ensure they are taking the fuel within Nigeria, which should help the government save a lot of money. I believe it is indeed the right time to eliminate subsidies,” added Dangote.

Reflecting on the challenges faced since launching the project in 2013, which experienced a five-year delay due to issues with state government and local communities, as well as a current $2.4 billion loan, Dangote expressed pride in finally achieving this milestone.

When asked whether the removal of the subsidy would make the refinery viable, Dangote responded, “We have options. We can produce and export, and when we do produce, we can sell locally. But as a large private enterprise, we need to generate profit. Building something worth $20 billion means we must definitely earn revenue. The decision regarding subsidies rests entirely with the government. We can’t change prices, but I believe the government must relinquish something for other benefits. Ultimately, I think this subsidy should be eliminated.”

President Bola Tinubu previously removed the fuel subsidy when he took office in May 2023, exacerbating a cost-of-living crisis that led to protests. However, the subsidy was quickly reinstated as inflation surged. Until Dangote’s refinery is operational, Nigeria has remained heavily reliant on imported petroleum products and has taken hesitant steps toward ending costly fuel subsidies, which cost $10 billion in 2022.

Dangote, who has the choice to either export his fuel or sell it domestically, reiterated that the decision regarding subsidies is in the hands of the government but emphasized that eliminating fuel imports would yield significant economic benefits.

GIK/fss/abj/APA

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