Just before the first passage, he says, "So Sollozzo figures he gets rid of the old man, I have to go in with him on the drugs." So I think that in the rest of that passage he's telling Michael how Sollozzo sees things. Sonny continues on to say that Sollozzo is dead meat, he doesn't care what the cost. So Sonny's mad at Tom for recommending a path that Sonny's already rejected.