Dangote Confirms Ownership of Oil Blocks, Tells FG What to Do about Petrol Subsidy
- Aliko Dangote, Chairman of the Dangote Group, has disclosed the need for Nigeria to end petrol subsidy
- He said ending subsidies on petrol will ease the pressure on the naira and determine the actual consumption volume
- The Nigerian billionaire businessman confirmed the ownership of two oil blocks, saying they will begin drilling in October
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Chairman of Dangote Group, Aliko Dangote, has asked the Nigerian government to end the petrol subsidy entirely.
The Nigerian billionaire said removing the petrol subsidy would help to determine the actual petrol consumption in Nigeria.
Source: Getty Images
Dangote confirms the date oil blocks will produce
Dangote also confirmed the ownership of two oil blocks in the upstream sector, saying that the blocks will begin production next month.
He also stated that fuel production from the Dangote refinery will ease the pressure on the naira.
In a 26-minute interview with Bloomberg on Monday, September 23, 2024, he stated that now is the right time for Nigeria to end petrol subsidies.
According to him, ending petrol imports will lift the pressure on the local currency and determine the actual consumption volume of petrol in Nigeria.
Why Nigeria must end petrol subsidy
Africa’s richest man said people tend to bloat the price of subsidised products, and the government will pay more.
He disclosed that his 650,000 bpd-capacity refinery will resolve many issues, and Nigerians will know the actual petrol consumption volume.
The billionaire recalled the challenges he faced after launching the project in 2023. He said there was a five-year delay due to issues with the government and host communities and a running loan of $2.4 billion, but he is very proud of his achievement.
Dangote said his refinery has two choices: exporting or selling the product locally. He stated that the company needs to make a profit.
He said that removing subsidies depends on the government and not the company, saying the refinery cannot change the price.
Before Dangote Refinery, Nigeria relied on imported petroleum products, which analysts say cost the nation $10 billion in 2022.
Dangote said petrol from the refinery is cheaper
Dangote disclosed that the pricing disagreement between the refinery and the Nigerian National Petroleum Company Limited (NNPC) was caused by the state oil firm buying the product cheaper than its imported petrol but providing a uniform price for all products.
He said that on the same day that NNPC purchased petrol price from the refinery, the national oil firm also imported about 800,000 metric tons of fuel, stating that the one NNPC purchased from the company was cheaper.
Oil marketers say that petrol from the Dangote Refinery could sell cheaper if the government intervened in FX.
The marketer revealed that if the government could peg the exchange rate at N1,000 per dollar, Dangote petrol would crash to N550 per litre.
The national publicity secretary of the Crude Oil Refiners Association of Nigeria (CORAN), Eche Idoko, said that Dangote sold petrol to NNPC N300 cheaper than imported fuel.
Refinery owners give conditions to crash petrol prices
Legit.ng previously reported that refinery owners stated that with the right interventions from the Nigerian government, the pump price of petrol from Dangote and other refineries could drop below N600 per litre.
The publicity secretary of the Crude Oil Refiners Association of Nigeria, Eche Idoko, disclosed that the association still firmly believes that local refineries like Dangote and others can crash the petrol price.
He disclosed that the N898 per litre the Nigerian National Petroleum Company Limited claimed to have bought the product from Dangote reflects the rising exchange rate.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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