Africa’s Richest man and CEO of the Dangote Group, Alhaji Aliko Dangote has revealed that Nigerians purchase premium motor spirit (PMS) at cheaper prices than Saudi Arabians. Dangote made this known in an exclusive interview with Bloomberg News.
Dangote was responding to a question on whether this is the right time for Nigeria to totally get rid of petrol subsidies.
He said, “I think it is (the right time), because all countries have actually gotten rid of subsidies.”
“Let me give you an example, Saudi Arabia. Saudis, the citizens believe that oil is our own God-given gift, so the government shouldn’t charge us for it. So (the Saudi Arabian) government was selling it (PMS) at a very low price. But today, as we speak, gasoline is about 40% cheaper in Nigeria than in Saudi Arabia, which I think it doesn’t make sense.
“Number two, the price of gasoline in Nigeria is about 60% the price of gasoline in our neighbouring countries and we have very porous borders. So, it (subsidy) is not sustainable. The amount of subsidies government has paid, the government cannot afford those subsidies”, Dangote noted.
Dangote earlier conceded that subsidy is a sensitive issue, adding that once a country subsidises the product, people would increase the price and this would lead to the government “paying what they are not supposed to be paying”.
On how his refinery can help the government get a handle on the actual PMS consumption in Nigeria, Dangote said the petrol sold locally by his refinery will be tracked to ensure the consumption rate is accounted for.
“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,” Dangote said.
“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”, he stated.
On the issue of pricing of PMS produced by his refinery and the viability of the government continuing with a form of petrol subsidy, Dangote said it is the government’s decision to either continue with or halt the payments.
“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”, he said.
“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. I think at the end of the day, the subsidy would have to go”, Dangote added.