Aliko Dangote, the founder of Dangote Petroleum Refinery, has called on the federal government to end the petrol subsidy, stating that it is the right time for the country to move away from such payments.
Dangote made this remark during an interview with Bloomberg TV on Monday, September 24.
“I think it is the right time to (take away subsidy) because all countries have gotten rid of subsidy,” Dangote said, emphasizing that continuing the subsidy is no longer sustainable for Nigeria. He pointed out that subsidies create price distortions and often lead to the government “paying what they are not supposed to be paying.”
Dangote acknowledged that the issue is sensitive, but explained that the current system encourages price increases, further burdening the government. He also mentioned that petrol sold locally by his refinery would be tracked to ensure accurate consumption rates are monitored.
While Dangote noted that the decision to halt the subsidy ultimately rests with the government, he stressed that continuing the payments is unsustainable and that the government cannot afford to keep subsidizing the product in the long term.
He said;
“But this refinery will bring quite a lot of issues out there. It would show the real consumption of Nigeria because nobody can tell. Some people say it is 60 million litres per day, some say it is less.
“But right now, by us producing, everything can be counted and accounted for. Most of the trucks or ships that will load from us, we will put a tracker on them to be sure they are going to take the oil within Nigeria and that can help the government to save a lot of money.
“For example, Saudis, the citizens believe that oil is our god-given gift and should not charge us for it. Government was selling it at a very low price. But today, as we speak, gasoline is about 40 percent cheaper in Nigeria than in Saudi Arabia, which I think does not make sense.
“Our price of gasoline is about 60 percent the price of our neighbouring countrries and we have porous borders, so it is not sustainable. Government cannot afford the amount of subsidies we are paying.
“We have a choice of exporting when we produce and we sell locally. We are a private company and it is true we have to make a profit. We built something worth $20 billion, and definitely we have to make money. The removal of subsidy is totally dependent on the government, not on us.
“We cannot change the price but I think the government would have to give up something for something.”