“It’s Time To Remove Fuel Subsidy” – Dangote Tells Tinubu’s Government

Aliko Dangote, the founder of Dangote Petroleum Refinery, has urged the federal government to put an end to the fuel subsidy system.

In a recent interview with Bloomberg, Dangote explained that fuel subsidies force the government to pay for things they shouldn’t, making it essential to discontinue the practice.

He argued that President Bola Tinubu’s administration cannot afford to maintain the payments for petrol subsidies.

Although President Tinubu initially declared the end of fuel subsidies in his May 29, 2023, inauguration speech, the subsidies were reinstated shortly after due to a spike in inflation.

In early September, there was another move towards ending the subsidy when the cap on gasoline prices was relaxed, although fuel prices still remained below market levels.

Speaking with Bloomberg on Monday, Dangote said he believes it’s the right time to stop the subsidies, as most countries have already done so.

“I think it is the right time to take away the subsidy because all countries have gotten rid of the subsidy.

“Our price of gasoline is about 60 percent the price of our neighbouring countries and we have porous borders, so it is not sustainable.

“Government cannot afford the amount of subsidies we are paying,” Dangote said.

While acknowledging that the issue is sensitive, Dangote explained that the current system encourages price hikes, which strain the government’s finances.

He also said that fuel produced by his refinery for local use would be closely monitored to ensure consumption is properly tracked.

Though the final decision on subsidies rests with the government, Dangote reiterated that the current arrangement is not sustainable.

He added that accurate tracking of fuel consumption, made possible by his refinery’s production, would help the government save money by ensuring fuel is only used within the country.

Dangote said, “But this refinery will bring quite a lot of issues out there. It would show the real consumption of Nigeria because nobody can tell. Some people say it is 60 million litres per day, some say it is less.

“But right now, by us producing, everything can be counted and accounted for. Most of the trucks or ships that will load from us, we will put a tracker on them to be sure they are going to take the oil within Nigeria and that can help the government to save a lot of money.

“For example, Saudis, the citizens believe that oil is our god-given gift and should not charge us for it. Government was selling it at a very low price. But today, as we speak, gasoline is about 40 percent cheaper in Nigeria than in Saudi Arabia, which I think does not make sense.

“Our price of gasoline is about 60 percent the price of our neighbouring countrries and we have porous borders, so it is not sustainable. Government cannot afford the amount of subsidies we are paying.

“We have a choice of exporting when we produce and we sell locally. We are a private company and it is true we have to make a profit. We built something worth $20 billion, and definitely we have to make money. 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.”

KanyiDaily recalls that Aliko Dangote had revealed why Nigeria won’t see economic growth under President Bola Tinubu.