The President and Chief Executive of Dangote Group, Alhaji Aliko Dangote, has reiterated his call for the Federal Government to remove fuel subsidies entirely. Speaking during a Bloomberg Television interview in New York, Dangote argued that subsidy removal would reveal the actual petrol consumption in Nigeria and help the government save significant funds.
Dangote's $20 billion mega refinery, which has the capacity to refine 650,000 barrels of crude oil daily, started supplying gasoline on September 15 and is expected to begin full crude oil production in October. He emphasized that ending petrol imports will alleviate pressure on the naira, which has lost approximately 70% of its value since the relaxation of currency rules.
Reflecting on his refinery’s development, Dangote shared that the removal of fuel subsidies is critical for stabilizing Nigeria’s economy, particularly in managing foreign exchange demands. He noted that petroleum products consume about 40% of Nigeria’s foreign exchange, and that domestic production could ease this burden, potentially stabilizing the naira. Despite the ongoing currency crisis, Dangote is confident that local fuel production will have a positive impact on Nigeria’s financial situation.
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In response to pricing concerns, Dangote revealed that the Nigerian National Petroleum Company Limited (NNPCL) had purchased gasoline from his refinery at a cheaper price than its imported fuel. He also highlighted ongoing negotiations for the sale of crude oil in naira, further aiming to reduce the country's foreign exchange pressures.
In addition to refining operations, Dangote confirmed the ownership of two oil blocks in the upstream sector, with production set to commence next month. The Federal Government, meanwhile, is providing land for the construction of a tanker park to address the challenge of over 3,000 fuel tankers queuing on newly constructed roads near the refinery, aiming to prevent road damage.
These developments come as Nigeria continues its tentative moves toward eliminating the costly fuel subsidies, which reached $10 billion in 2022. Ending subsidies remains a politically sensitive issue, but Dangote’s refinery is expected to play a pivotal role in Nigeria’s journey toward fuel independence and economic stabilization.
