Alhaji Aliko Dangote, the President and CEO of the Dangote Group, has called on the Nigerian government to take decisive action by eliminating fuel subsidies. He outlined the potential benefits of this move, emphasizing its importance for Nigeria’s financial stability.
Dangote highlighted that the removal of fuel subsidies would help reveal the country’s true petrol consumption, alleviating the financial strain on the government. He also stressed that ending fuel imports could significantly reduce the pressure on Nigeria’s currency.
Addressing the complexities of the subsidy issue, Dangote explained that artificially lowering prices often leads to inflated costs, with the government ultimately overpaying. He expressed that this is the right time to phase out subsidies, a move that would bring much-needed clarity and fairness to the market.
He also elaborated on how his refinery in Lagos could bring transparency to Nigeria’s fuel sector by providing accurate data on consumption. According to Dangote, there have been conflicting reports on the country’s daily gasoline usage, with estimates ranging from 60 million liters to lower figures. The new refinery, he said, would introduce precise tracking mechanisms, including monitoring the movement of trucks and ships, ensuring that fuel stays within the country. This transparency, he added, could save the government substantial funds.
Discussing his involvement in Nigeria’s oil production, Dangote mentioned his company’s plans to start production from two oil blocks in October. While he acknowledged the importance of the upstream sector, he noted that he had no intentions of making significant investments in that area.
Reflecting on the challenges his refinery project faced since its inception in 2013, Dangote revealed that a five-year delay caused by issues with local authorities and communities, as well as a $2.4 billion loan, created significant obstacles.
When questioned about the impact of the fuel subsidy on the refinery’s viability, Dangote pointed out that profitability is a priority for a private company. He stated that the decision to remove subsidies lies entirely with the government, though he believes the policy will ultimately be scrapped.
The country’s Finance Minister, Wale Edun, has reiterated that the removal of fuel subsidies is a work in progress, with efforts underway to shift the country’s energy focus towards Compressed Natural Gas (CNG). The former governor of Kaduna State, Nasir El Rufai suggests that current spending on petrol subsidies surpasses previous levels.
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