THE chairman of the Dangote Group, Aliko Dangote, has urged President Bola Tinubu-led federal government to get rid of petrol subsidies.

He said the right time to end the regime is now.

The billionaire businessman, and owner of one of the world’s largest refineries, which kicked off operations recently in Nigeria’s commercial hub – Lagos State – made the call in an interview with Bloomberg on Monday, September 23.

He spoke on other issues in the interview, including his regret over his failure to buy Arsenal FC, and the commencement of operation on his oil blocks, among others.

Need to end petrol subsidy 

According to Dangote, the petrol subsidy leads to the government paying what it is not supposed to pay, pointing out that Tinubu’s administration could not afford to sustain petrol subsidy payment.

“I think it is the right time to take away the subsidy because all countries have gotten rid of the subsidy.

“Our price of gasoline is about 60 per cent the price of our neighbouring countries and we have porous borders, so it is not sustainable. Government cannot afford the amount of subsidies we are paying,” Dangote said.

He noted that the petrol subsidy had been a very sensitive issue faced by the Nigerian government.

He said subsidising it has resulted in some person bloating the price and having the government pay for something it is supposed not to have paid for.

“It is the right time to get rid of subsidies,” Dangote maintained.

He added that the non-disclosure of the amount of petrol consumption in the country was a challenge, reiterating that the Dangote Fefinery would show the real consumption of Nigerians.

“Nobody can tell you [the volume of consumption]. 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,” Dangote said.

He hinted that his refinery had put in place tracking measures to ensure that petrol products loaded from the Dangote Refinery were delivered within Nigeria.

“I think [that] can help the government save quite a lot of money. I think it is the right time, you know, to remove the subsidy,” the business mogul said.

‘I won’t invest heavily in Nigeria’s oil block’

The business mogul also said he would not be investing heavily in Nigeria’s upstream sector, despite owning two oil blocks which are set to begin production in October this year.

“Well, our upstream, you know, is not big. We have two oil blocks which we have and we are starting production this October,” he said.

Crude oil supply and pricing issues

According to Dangote, negotiations are still on with the government on pricing, expressing confidence in the ability of the Minister of Finance, Wale Edun, and the Federal Inland Revenue (FIRS) boss, Zaach Adedeji, to thrash out all pending issues.

By October, the NNPCL will supply about 12 million barrels, broken down into 390,000 barrels per day, he noted.

“Already we have agreed, like, for example, in October, they (NNPCL) are going to give us 12 million barrels, which is averagely about 390,000 barrels a day, which we’ll refine. We’ll sell both gasoline, diesel, and aviation fuel, and if there’s any excess, we’ll export,” he explained.

According to the business mogul, the recent template announced by the NNPCL as the price it is getting petrol from the refinery was wrong.

“It wasn’t really a disagreement, per se. NNPC bought from us this particular one on the 15th of September at the international price, and they also bought over 800,000 metric tons of gasoline imported.

“So the one that they bought from us is cheaper than the one they are importing. And so when they announced our price, the guy (NNPC spokesman), I don’t know whether he was authorised or not, but it wasn’t the real price.

It is most likely the price NNPCL announced is what it cost them, including profit but their imported price is about 15 per cent to 20 per cent more expensive than ours, he said.

Why NNPCL failed to retain 20% stake in Dangote Refinery

According to Dangote, the decision of NNPC to reduce its stake in the refinery from 20 per cent to 7.2 per cent was a huge mistake.

The initial agreement was for NNPCL to pay N1 billion dollars òut of the $2.79 billion deal and the remaining balance twice.

“One portion was that every crude they supply to us, 300,000 barrels per day,  we’ll deduct $2 and then up to the time they finish paying that, one third. The other one-third will come out of their profit,” he explained.

The first agreement did not sail through even though Dangote refinery agreed to NNPCL’s request to pay cash.

This led to signing another agreement for NNPCL to pay after one year, he said, noting that no interest was added to the $1.8 billion balance.

“The month for them to pay was June. And by June, they came back to us and said, no, they’ve changed their minds, and they want to remain at 7.2 per cent.

“So, we left it, and we own now the rest of the shares; they own 7.2 per cent. And that’s what it is. But I think they made a big mistake,” he said, noting that NNPCL can no longer raise its stake in the refinery.

The ICIR reports Tinubu had, on May 29, 2023, during his inaugural speech, said petrol subsidy was gone.

However, recent disclosure by the Nigerian National Petroleum Company Limited (NNPCL) proved otherwise.

A cursory look at the NNPCL 2023 audited financial statements government showed that the federal government paid approximately N3.57 trillion on petrol subsidies last year.

At the presentation of the NNPCL’s financial report on Tuesday, August 20, the chief finance officer of NNPCL, Umar Ajiya, confirmed that the government was paying subsidies of petrol.

Ajiya disclosed further that the NNPCL as the sole importer of petroleum products was selling petrol at half the cost of the landing price, and that the remaining half was being borne by the government as under-recovery expenses.

I regret not buying Arsenal FC

Dangote also revealed that he regretted not buying the premiership giant, Arsenal in 2020.

He rued the fact that the club’s price has now doubled the amount its owners charged in 2020, adding that the club is now doing better than it did at the time.

Dangote said he used his resources to build a refinery instead of buying Arsenal Football Club.

The billionaire stated that he no longer considers purchasing the club.

“But you know everything has gone up and the club too is doing very well, Arsenal is doing extremely well right now. That time, Arsenal wasn’t doing well.

“I think I don’t have that kind of excess liquidity to go and buy a club for $4 billion so to speak and use it as a promotional something.

“But what I will do is to continually be the biggest fan of Arsenal. I watch their games anytime they are playing. So, I will remain a major supporter of Arsenal but I don’t think it makes sense today to buy Arsenal,” he stated.