Aliko Dangote, President and Chief Executive of the Dangote Group, has called on the Federal Government to completely eliminate fuel subsidies. During a 26-minute interview with Bloomberg Television in New York on Monday, Dangote stated that the time is right to end subsidies, which have drained trillions of naira from Nigeria’s treasury.

He explained that removing the subsidy would help accurately determine the nation’s actual fuel consumption. His comments come as petrol is now being lifted from the Dangote Refinery, with prices rising to ₦950 per litre in Lagos and exceeding ₦1,000 per litre in northern regions.

Dangote added that fuel production from his refinery would ease pressure on the naira and revealed that his company owns two oil blocks in the upstream sector, with production expected to begin next month.

“Subsidies are a sensitive issue,” Dangote said. “When you subsidise something, the prices are often inflated, leading to the government paying more than it should. Now is the right time to remove the subsidies.”

He continued: “Our refinery will solve many issues, particularly by providing a clear picture of Nigeria’s actual fuel consumption. Some estimates suggest the country consumes 60 million litres of gasoline daily, while others claim it is less. By producing locally, we will be able to track every truck or ship loading from our refinery, which will ensure that the oil is used within Nigeria. This level of accountability will save the government significant sums of money. It is indeed the right time to remove the subsidy.”

Regarding whether the retention of subsidies would impact his refinery, Dangote responded: “We have options. We can produce and export, or we can sell locally. As a private company, we need to be profitable, especially after building a $20 billion facility. The decision to retain or remove subsidies rests with the government, not us. While we cannot alter the price, I believe the government will eventually need to give something up for the greater good.”

Prior to the Dangote Refinery becoming operational, Nigeria had relied entirely on imported petrol. President Bola Tinubu ended the fuel subsidy upon taking office in May 2023. This move pushed inflation to around 34% in 2024, before easing to 32.15% in August. Food inflation remains high at approximately 40%.

The naira has also depreciated by around 70% against the US dollar since currency regulations were relaxed last year. Dangote noted that petroleum products account for about 40% of Nigeria’s foreign exchange consumption. However, he suggested that local fuel production could help stabilise the naira. He disclosed that his refinery had begun supplying gasoline to the Nigerian National Petroleum Company Limited (NNPCL) for domestic sale on 15 September.

Clarifying the pricing dispute with the NNPCL, Dangote explained that the national oil company purchased its stock from his refinery at a lower price than its imported fuel but applied a uniform pricing structure across all products.

“There was no real disagreement. NNPCL bought gasoline from us on 15 September at international market rates, which were lower than what they paid for imported fuel. However, when they announced the price of our product, the figure they quoted wasn’t accurate—it likely reflected the costs associated with their imports, which are about 15% higher than ours.

“What they should do is implement a basket pricing system or, if they choose to remove the subsidy, they can make that announcement and everyone will adjust accordingly,” he said.

Dangote revealed that discussions are ongoing, with a final agreement on crude oil sales expected by October. He indicated that the crude oil would be sold in naira after being purchased in naira, with pricing determined by the current exchange rate.

“Our plan is to sell crude at market rates, say $80 per barrel, based on an agreed exchange rate. We will also sell fuel domestically. This could alleviate up to 40% of the pressure on the naira because petroleum products currently account for about 40% of foreign exchange demand. By eliminating this demand, the naira will stabilise. Even if the government continues to subsidise fuel, they will at least know exactly what they are paying for.”

Dangote concluded by stating that the crude oil sales agreement would be a mutually beneficial deal for both his company and the government.

“The agreement will ensure energy security, with the government providing us with crude. For instance, in October, they are expected to supply 12 million barrels, averaging around 390,000 barrels per day. We will produce gasoline, diesel, and aviation fuel. It’s a win-win for everyone,” he said.