Africa's richest man, Aliko Dangote, has called on the Nigerian government to remove all fuel subsidies, emphasizing that now is the right time to take this crucial step. Speaking in a 26-minute interview with Bloomberg Television in New York, Dangote explained that eliminating fuel subsidies would provide a clearer picture of the country’s actual gasoline consumption and alleviate pressure on the naira.
According to Dangote, the removal of fuel subsidies will enable better tracking of Nigeria's fuel consumption, something that has been difficult to quantify accurately. His $20 billion refinery in Lagos, which has the capacity to refine 650,000 barrels of crude oil per day, could play a key role in this transformation.
“Subsidies are a sensitive issue,” Dangote stated. “When you subsidize, people inflate prices, and the government ends up paying more than necessary. Now is the time to get rid of these subsidies.”
He further explained that once his refinery is fully operational, it will provide accurate data on Nigeria's fuel usage. “Some estimates put daily consumption at 60 million litres, but no one knows for sure. With local production, we can finally account for every litre. We will track every truck and ship leaving the refinery to ensure the oil stays within Nigeria. This will help the government save a significant amount of money.”
Dangote also reflected on the challenges faced during the construction of his refinery, which began in 2013. Delays caused by issues with the state government, host communities, and a $2.4 billion loan resulted in a five-year setback. Despite these hurdles, Dangote expressed pride in the achievement.
Addressing concerns about the refinery’s profitability, he said, “We are a private company. We’ve invested $20 billion, so, of course, we need to make a profit. Whether the government removes the subsidy or not is beyond our control. But in the long run, removing subsidies will benefit the country.”
President Bola Tinubu initially removed the fuel subsidy upon taking office in May 2023, a decision that sparked protests as inflation surged, exacerbating the cost-of-living crisis. However, the subsidy was quickly reinstated. In early September, another step was taken when the gasoline price cap was relaxed, though prices still remain below market levels.
Before Dangote’s refinery, Nigeria was heavily reliant on imported petroleum products, costing the country a staggering $10 billion in fuel subsidies in 2022 alone. With his refinery now in operation, Nigeria is inching closer to ending its reliance on expensive fuel imports and the costly subsidies that come with it.
