Fuel Subsidy Removal: Implications on the Nigerian Economy
Abstract
This study explores the far-reaching implications of fuel subsidy removal on the Nigerian economy, particularly following the 2023 elimination of the premium motor spirit subsidy. Recognizing the longstanding policy debate surrounding energy subsidies in developing economies, the authors employ a systematic review methodology guided by PRISMA standards to assess evidence from ten peer-reviewed articles published between 2012 and 2024. Through a combination of bibliometric and narrative analyses, the study synthesizes the economic, political, environmental, and social impacts of fuel subsidy reforms. Key findings indicate that while subsidy removal contributes to increased government revenue and reduced environmental costs, it also exacerbates inflation, lowers consumer demand, and disproportionately affects vulnerable households and business sectors. The study underscores the need for proactive government interventions—such as targeted support mechanisms, refinery revitalization, and social safety nets—to mitigate the adverse effects and ensure a more equitable transition.
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