Ɗangote Petroleum Refinery, sole producer of petrol being off-taken and distributed for Nigerians, has declared that the Government should end subsidy, a move that would cause imminent surge in the prices of the product to as high as N1,800 litre to N2,000/ litre.
The founder of the 650,000 barrels per day capacity refinery, who threw his full weight behind subsidy removal just nine days after his facility started production of petrol, said in an interview with Bloomberg that this is the right time for the federal government to stop petrol subsidy.
The product, which sold for N650 per litre at the NNPCL outlets before September 15, skyrocketed to as high as N1,010 per litre in same outlets on the day the private refinery began production. “I think it is the right time to (take away subsidy) because all countries have gotten rid of subsidy”, he said.
However, stakeholders have expressed the fear that with the call for full subsidy removal, the prices could be as high as N1,800 per litre.
Statistics showed that the price of the product would go up to the market price which is higher than the subsidised price any time subsidy is removed, but Ɗangote maintained that what actually increases a product’s price is the subsidy.
Subsidy, according to him, is a sensitive issue, adding that once a country subsidises the product, people would increase the price.
To Ɗangote, subsidy would lead to the government “paying what they are not supposed to be paying”. According to him, petrol subsidy is not sustainable and the government cannot afford to keep subsidising.
“Our price of gasoline is about 60 percent 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”, he said.
Speaking further on the viability of petrol subsidy, Ɗangote said it is the Government’s decision to either continue with or halt the payments. “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”, he stressed.
Ɗangote said eventually, the subsidy would have to go. He said that the petrol sold locally by his refinery will be tracked to ensure the consumption rate is accounted for.
