By Aliu Akeem
Aliko Dangote, President of the Dangote Group, has called for the removal of Nigeria’s petrol subsidy, highlighting its adverse effects on the economy. Speaking in an interview with Bloomberg Television, Dangote outlined how the subsidy distorts market prices and burdens government finances. He emphasized that with the Dangote Refinery’s expected output, Nigeria could more accurately track fuel consumption, saving billions in public expenditure.
The issue of petrol subsidy has long been controversial in Nigeria, with governments grappling over its potential removal due to its socio-economic implications. According to Dangote, “Subsidy is a susceptible issue. Once you subsidize, people will bloat the price, and the government ends up paying more than it should.” He added that eliminating the subsidy would create a more transparent system and ultimately benefit Nigeria’s economy.
Refinery’s Role in Stabilizing Nigeria’s Economy
Dangote’s $20 billion refinery, set to produce significant quantities of refined products domestically, is expected to alleviate the financial strain on Nigeria’s foreign reserves. By producing and selling petroleum products locally, the refinery will reduce the demand for foreign exchange, as petroleum imports currently account for about 40% of Nigeria’s forex needs.
Furthermore, Dangote indicated that the refinery would implement advanced tracking measures, ensuring that fuel stays within the country. “We are going to put a tracker on the trucks and ships that come to load from us to ensure the petroleum products remain within Nigeria. This system will help curb smuggling and other inefficiencies,” he noted.
While the refinery is expected to solve key supply chain issues, the ultimate decision to end the subsidy lies with the Nigerian government. Dangote urged the government to reconsider its stance on subsidies, stating, “It is the right time to get rid of subsidy.”
Economic Benefits of Petrol Subsidy Removal
The removal of the petrol subsidy is expected to generate significant savings for the Nigerian government. According to Dangote, redirecting these funds into critical sectors such as healthcare, education, and infrastructure would better serve the public interest. He reiterated that the inflated costs of subsidized petrol continue to drain the nation’s budget.
By eliminating the subsidy, the Nigerian government could reinvest in development projects and enhance long-term economic growth. Moreover, Dangote believes that the refinery’s operations will provide a more accurate picture of the country’s true petrol consumption, which is currently estimated at 60 million liters per day, though this figure is debated.
