Dangote Urges Immediate Removal Of Petrol Subsidy By FG.

Alhaji Aliko Dangote, President and CEO of the Dangote Group, has urged the Federal Government to fully eliminate fuel subsidies.

According to him, removing subsidies would provide a clearer picture of the country’s actual petrol consumption. He also revealed that his company owns two oil blocks in the upstream sector, with production expected to begin next month.

Dangote further mentioned that fuel production from his $20 billion mega refinery in Lagos, which can refine 650,000 barrels of crude oil per day, will help alleviate pressure on the naira.

During a 26-minute interview with Bloomberg Television in New York on Monday, which was monitored by our correspondent, Dangote emphasized that now is the opportune time to end fuel subsidies.

Dangote, who has the option to either export his fuel or sell it locally, noted that the decision on fuel subsidies rests with the government. However, he highlighted that halting gasoline imports would significantly ease currency pressures.

The naira has depreciated by around 70 percent against the dollar since the government eased rules that previously pegged the currency at an artificially high rate.

The ongoing shortage of dollars in Nigeria’s foreign exchange market continues to impact the naira, worsened by the need to pay for imported gasoline in U.S. dollars.
“Petroleum products account for about 40 percent of our foreign exchange,” Dangote said, adding that fuel from his refinery, which began supplying gasoline to the state-owned oil company on September 15 for domestic sale, “could help stabilize the naira.”

During the interview, Dangote also discussed a pricing disagreement with the Nigerian National Petroleum Company Limited (NNPC). He explained that while NNPC purchased gasoline from his refinery at a lower price than imported fuel, it still sold both at the same rate.

“There wasn’t a disagreement, as such. NNPC bought fuel from us on September 15 at international prices, along with 800,000 metric tons of imported gasoline. The fuel they bought from us was actually cheaper than the imported one,” Dangote clarified.