Aliko Dangote, Founder and Chairman of Dangote Petroleum Refinery, has made a strong appeal to the federal government to put an end to the fuel subsidy regime, citing its unsustainable nature and detrimental impact on the nation’s finances.
In a recent interview with Bloomberg, Dangote emphasised that maintaining fuel subsidies would lead to the government “paying what they are not supposed to be paying.” He stressed that the current subsidy framework is no longer tenable and must be abolished.
Dangote’s call to action is particularly pertinent, given President Bola Tinubu’s initial commitment to ending fuel subsidies during his inauguration speech on May 29, 2023. Although the policy was later reinstated due to concerns over inflation, the recent easing of the cap on fuel prices in early September marked a significant step towards subsidy removal.
The business mogul highlighted Nigeria’s fuel price disparity with neighbouring countries, which stands at approximately 60% lower. This price differential, coupled with the country’s porous borders, has created an environment conducive to smuggling and unsustainable subsidy payments.
Dangote’s advice comes as his refinery commences petrol lifting, with prices adjusted to N950 per litre in Lagos and above N1000 in northern regions. He assured that domestic fuel production from his refinery would alleviate pressure on the naira and confirmed ownership of two oil blocks in the upstream sector, slated for production commencement next month.
Dangote emphasised the sensitivity of subsidies, which are vulnerable to price manipulation and lack transparency. By eliminating subsidies, the government can prevent unnecessary payouts and promote a more efficient fuel market.
The Dangote Refinery is poised to revolutionise Nigeria’s fuel landscape by providing transparent and accurate tracking of fuel consumption, reducing dependence on imports and alleviating currency pressures; enhancing domestic fuel production and energy security.
Nigeria can mitigate financial losses, stimulate economic growth, and ensure a more sustainable energy future by discontinuing fuel subsidies and promoting domestic fuel production.
