Aliko Dangote, President and CEO of Dangote Group, has called on the Federal Government to fully eliminate fuel subsidies.
In a 26-minute interview with Bloomberg Television in New York on Monday, Dangote emphasized that the time is right to end the costly subsidies, which have drained trillions of naira from the country’s finances.
He explained that removing subsidies would help accurately assess Nigeria’s true fuel consumption. His comments come as the Dangote Refinery begins lifting petrol, with prices rising to ₦950 per litre in Lagos and over ₦1,000 in northern regions.
Dangote also highlighted that fuel production from his refinery could ease pressure on the naira and confirmed his ownership of two oil blocks in the upstream sector, with production expected to begin next month.
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He said, “Subsidy is a very sensitive issue. Once you are subsidising something then people will bloat the price and then the government will end up paying what they are not supposed to be paying. It is the right time to get rid of subsidies.”
“But this refinery will resolve a lot of issues out there, you know, it will show the real consumption of Nigeria, because, you know, nobody can tell you. Some people say 60 million litres of gasoline per day.
“Some say, it’s less. But right now, if you look at it by us producing, everything can be counted. So everything can be accounted for, particularly for most of the trucks or ships that will come to load from us. We are going to put a tracker on them to be sure they are going to take the oil within Nigeria, and that, I think, can help the government save quite a lot of money. I think it is the right time, you know, to remove the subsidy.”
Dangote also spoke on whether or not the federal government retaining fuel subsidy would pan well for his refinery, “Well, you see, we have a choice of either one. We produce, we export, and when we produce, we sell locally. But we are a big private company. And yes, it’s true, we have to make a profit. We build something worth $20bn so definitely we have to make money.
“The removal of subsidies is totally dependent on the government, not on us. We cannot change the price, but I think the government will have to give up something for something. So I think at the end of the day, this subsidy will have to go.”
Before the Dangote Refinery became operational, Nigeria imported all of the petrol consumed in the country. President Bola Tinubu removed the fuel subsidy upon assuming office in May 2023, leading to a spike in inflation, which reached around 34% in 2024 before slightly easing to 32.15% in August. Food inflation remains elevated at approximately 40%.
Additionally, the naira has depreciated by about 70% against the dollar since the government relaxed rules that had previously kept the currency artificially high.
“Petroleum products consume about 40 per cent of our foreign exchange,” Dangote said, adding that fuel from his refinery, which started supplying gasoline on Sept. 15 to the state-owned oil company for domestic sale, “can actually stabilize the naira.”
The billionaire also disclosed details of a pricing dispute with the Nigerian National Petroleum Company Limited.
He explained that the national oil company purchased its current stock from the Dangote Refinery at a lower price compared to its imported fuel, yet opted to set a uniform price for all products.
“There wasn’t really a disagreement, per se. NNPC bought from us on the 15th of September at the international price, which they also bought, about 800,000 metric tons of gasoline imported. So the one that they bought from us actually is cheaper than the one they are importing.
“And so when they announced our price, the guy, I don’t know whether he was authorized. It wasn’t really the real price. What they have announced is most likely that is what it cost them, including profit and other expenses.
“And then the other one is one that they imported. But the people don’t know how much they spend in terms of imports, but their importation is almost, maybe about 15 per cent more expensive than ours, you know.
“So what they are supposed to do is to sell at a basket price, or if they want to remove subsidy, they can announce that they will remove subsidy, which is okay, everybody you know will adjust it.”
Dangote mentioned that discussions are still underway, with a detailed agreement expected to be finalized this week regarding the planned crude oil sales, which are set to commence in October.
“We will sell the crude in naira after we have bought in naira. So now we are currently working out with the committee that the exchange rate is going to be priced. It is going to be normal pricing, you know, if crude is at $80, we will pay that price at an agreed exchange rate.
“And then we will also sell in the domestic market. What that will do is that it’s going to remove 40 per cent pressure on the naira. So because, see, the petroleum products consume about 40 per cent of foreign exchange, so you know, and then, you know, it’s like you have 40 per cent of demand been taken out so that can actually stabilize the naira and even if they subsidise, they would know what they are paying for.
“The deal is to give the government something that they want. It’s also a win-win situation for all and it would benefit the country.
“Currently, discussions are still ongoing to determine the details of the agreement. They are working out something that I think would be a win-win between us and the NNPCL.
“The agreement is very robust. Well, first of all, we would have energy security where they will give us crude. For example, in October, they’re going to give us 12 million barrels, which is on average, about 390,000 barrels a day, which will sell both gasoline, diesel, and aviation fuel.
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