Dangote Advocates End to Fuel Subsidy

Nigerian business magnate Aliko Dangote has urged the federal government to end the fuel subsidy regime, citing its financial unsustainability.

In an interview with Bloomberg, Dangote stated, “I think it’s the right time to take away the subsidy because all countries have gotten rid of the subsidy.” He noted that Nigeria’s gasoline price is about 60% lower than neighboring countries, making it unsustainable.

Dangote’s plea comes after President Bola Tinubu initially removed the subsidy in May 2023 but reinstated it due to inflation concerns. The government recently eased the cap on gasoline prices in early September.

The founder of Dangote Petroleum Refinery believes his refinery’s production will ease pressures on the naira. “Subsidy is a very sensitive issue. Once you are subsidizing something, then people will bloat the price, and then the government will end up paying what they are not supposed to be paying.”

Dangote confirmed ownership of two oil blocks with expected production in October. His refinery commenced petrol lifting, with prices increased to ₦950 per liter in Lagos and above ₦1000 in the north.

The refinery aims to resolve issues surrounding Nigeria’s fuel consumption, providing accurate data. “But this refinery will resolve a lot of issues out there… it will show the real consumption of Nigeria,” Dangote noted.

The federal government may allow Dangote Refinery to set its petrol prices, marking a shift in the country’s fuel pricing structure and potentially paving the way for the eventual removal of fuel subsidies.