Dangote calls for fuel subsidy removal to stabilise Nigeria’s economy

Discussions continue between Dangote and NNPCL to finalise a long-term agreement that benefits both parties and ensures fuel availability for Nigerians.

The President and Chief Executive of Dangote Group, Aliko Dangote, has urged the Nigerian government to completely remove fuel subsidies, arguing that this will help determine the country’s actual fuel consumption and ease the burden on the economy.

In an interview with Bloomberg Television in New York, Dangote stressed that subsidies have cost Nigeria trillions of naira and are unsustainable.

“Subsidy is a very sensitive issue. Once you subsidise something, the price gets inflated, and the government ends up paying more than it should. This is the right time to get rid of the subsidy,” Dangote remarked.

His statements come after the Dangote Refinery began lifting petrol prices, leading to a hike to ₦950 per litre in Lagos and over ₦1000 in northern regions.

Dangote emphasised that fuel production from his refinery would alleviate pressures on the naira. He also revealed that his company owns two oil blocks in the upstream sector, with production expected to start next month.

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Remover subsidy, more transparency for refineries

Addressing the impact of removing the subsidy, Dangote argued that the refinery would offer more transparency in Nigeria’s fuel consumption.

“Some say Nigeria consumes 60 million litres of gasoline daily, others less. Our production will ensure everything is tracked and accounted for, helping the government save significantly.”

He also touched on whether retaining the subsidy benefits his business: “As a private company, we have a choice to export or sell locally. But ultimately, subsidy removal is up to the government. We’ve invested $20bn, so we need to make a profit. At the end of the day, the subsidy has to go.”

Nigeria previously relied entirely on imported petrol before Dangote’s refinery began operations.

President Bola Tinubu removed the subsidy in May 2023, contributing to inflation, which peaked at 34% in 2024 before falling to 32.15% in August.

Food inflation remains high at around 40%, while the naira has lost 70% of its value against the dollar since the currency’s peg was relaxed.

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Fuel production to ease naira pressure

Dangote assured that his refinery’s output could stabilise the naira, which has been under severe pressure.

“Petroleum products consume about 40% of our foreign exchange. Our refinery, which began supplying petrol on September 15, can stabilise the naira by reducing demand for imported fuel,” he explained.

He also addressed the recent pricing disagreement between the Nigerian National Petroleum Company Limited (NNPCL) and its refinery.

According to Dangote, NNPC purchased fuel from his refinery at a lower price than imported fuel but presented a uniform pricing system.

“The one NNPC bought from us is cheaper than what they’re importing. The real issue is that their imported fuel costs about 15% more, and they must sell at a basket price or announce a subsidy removal,” Dangote said, adding that discussions are ongoing, with a detailed agreement expected soon.

In October, the refinery is expected to receive 12 million barrels of crude from the government, equivalent to 390,000 barrels daily. This will enable the production of gasoline, diesel, and aviation fuel for domestic consumption, reducing pressure on foreign exchange and providing energy security for Nigeria.

Discussions continue between Dangote and NNPCL to finalise a long-term agreement that benefits both parties and ensures fuel availability for Nigerians.