Effective Management of Fuel Subsidy Removal: A Nexus for Sustainable Development in Nigeria

Effective Management of Fuel Subsidy Removal: A Nexus for Sustainable Development in Nigeria

Dr. Ayano David Ayanniyi (Phd)¹, Dr. Sheidu Kamoru Olanrewaju (Phd)²

¹Deputy Director/ Head, Sectoral Division, Centre for Management Development, Shangisha, Magodo, Lagos.

²Department of Social Sciences Education, Faculty of Education, University of Lagos

DOI: https://dx.doi.org/10.47772/IJRISS.2025.905000488

Received: 18 May 2025; Revised: 25 May 2025; Accepted: 28 May 2025; Published: 24 June 2025

ABSTRACTS

The study assesses the social and economic impacts of subsidy removal on Nigerians population. Specifically, the study examines the positive impacts of fuel subsidy removal on Nigerian population; investigate the negative impacts of fuel subsidy removal on Nigeria population; and analyze the relationship between fuel subsidy removal and sustainable development. The study employed the frequency distribution, simple percentages and hypothesis relationship tests to analyze the impacts of fuel subsidy removal. The results of the study are as follows: that the general sentiment is negative, with more than half (54.1%) strongly disagreeing, indicating a strong public perception that the subsidy removal policy has not improved poverty conditions; that most people do not believe that the removal of fuel subsidies in Nigeria has led to improvements in food security or nutrition;  that the overwhelming majority of respondents perceive the removal of fuel subsidies as detrimental to health, education and wellbeing, possibly due to rising costs of transportation, goods, and healthcare; that removing fuel subsidies has not been widely perceived as a driver of affordable clean energy in Nigeria; that a majority of respondents (67.5% total) either agreed or strongly agreed that economic growth will decrease in the short term with the removal of fuel subsidy; and that the largest group strongly disagreed with the statement. that subsidy removal leads to increased employment. Also, the relationship hypotheses tests show both significant and insignificant relationships between variables. The following recommendations are therefore suggested: government should find alternative ways rather than removal of fuel subsidy only so as to improve the following social and economic factors such as increase inflation, increase poverty, increase fuel smuggling, increase crime, increase the prices of petroleum products and loss of jobs in the informal sector; government should not rely on the removal of fuel subsidies in Nigeria as a mean of improving food security or nutrition; government should note that the removal of fuel subsidies is detrimental to health and wellbeing, possibly due to rising costs of transportation, goods, and healthcare; government should identify that removing fuel subsidies has not been widely perceived as a driver of affordable clean energy in Nigeria; government should find a safe net because economic growth will decrease in the short term with the removal of fuel subsidy; and government should effectively manage labour market because subsidy removal leads to increased unemployment.

Keywords: Fuel subsidy, sustainable development, social and economic factors

INTRODUCTION

Background to the study

Subsidy is generally an integral part of government expenditure both in developed and developing countries. Subsidies have long been employed by governments worldwide to support various sectors of the economy, ranging from agriculture and energy to transportation and healthcare. The Keynesian economists advocated government spending not only to stimulate economic growth and stabilize economies during times of economic downturn, but also as a means of cushioning the impact of increased cost burden on the consumer or populace. Thus, subsidies are targeted at achieving various economic and social objectives by providing financial assistance to some specific and strategic industries in order to mitigate market failure. However, the efficacy and sustainability of these subsidies have come under scrutiny due to their potential distortive effects on market mechanisms and fiscal sustainability (Lanjouw & Ravallion, 1999).

Oyasipe and Olukoya (2024) described subsidies as essentially a form of a reverse tax, serving as a deliberate government intervention to bolster selected economic agents, be it consumers or producers. Subsidies can be applied across various markets involving the exchange of goods and services. It is an intervention by the government designed to reduce consumer prices or increase producer selling prices. These interventions find extensive application in numerous countries and industries, spanning commodities such as petroleum products, food items, and agricultural inputs like fertilizers and machinery. Subsidies can serve as potent policy instruments to address market failures and achieve specific social objectives

Governments in many developing nations use fuel subsidies to encourage economic growth and make basic transportation and cooking fuels more affordable. Subsidies, however, put a tremendous burden on public coffers and can result in excessive consumption and market inefficiencies. International organizations frequently advocate for economic reform by eliminating fuel subsidies, but the effects are multifaceted.

A fuel subsidy is an aid the government provides that makes the commodity available at a lesser cost to consumers. The subsidising is done in Nigeria to make the product affordable and accessible and to make life easy for the citizens. Government resources are used to pay for the differences, sustain the welfare of the citizens, and bridge the gap between private costs and societal benefits. Fuel subsidy has been in place in Nigeria since the 1970s; the Nigerian government has since been augmenting the differences in the importation cost of Premium Motor Spirit (PMS) and the cost at which customers purchase the commodity. The benefit of a subsidy is that it lowers the cost of products and living costs. However, it financially burdens the government (Adegoke, 2023). Fuel subsidy removal implies the deliberate action by the government to withdraw all forms of reductions and leverages on the price of crude oil or its products (Oladeji & Akinlabi, 2022). This subvention is a means through which the government reduces the purchase of crude oil products and its allies. However, the country’s subvention of crude oil products significantly affects the economy. It poses a substantial financial burden on the system, diverting resources that could be allocated to other important sectors such as education, health, and infrastructure. Over the years, the purchase cost of petrol has kept increasing regularly, which has led to its scarcity and adverse effect on the general populace due to the subsidised rate attached. The non-functional state of Nigeria’s refineries for the past three decades due to inconsistency in government policy, lack of maintenance culture, and corruption, among others, has led to the continuous importation of refined petroleum, which the country produces. The impact of oil on the nation’s economy is large, and this is no surprise because Nigeria has enormous oil, which ranks it first in Africa, coupled with its 24% allotment in the world. Unfortunately, Nigeria exports crude oil to refine and then spends much money transporting refined products. This singular act of importation of refined petroleum affects the nation’s economy, stains the local currency, hinders job opportunities, affects local value creation and causes an increase in the nation’s annual budget due to the large sum going into fuel subsidy (Adekunle, & Akinyemi, 2021).

Thirteen years after diesel was deregulated, kerosene subsidy was removed in 2016. However, the subsidy on Petroleum Motor Spirit (PMS) has proven to be the biggest challenge to the managers of the Nigerian economy. On an annual basis, a substantial portion of the national inflow is committed to funding the subsidy scheme. In reality, there are good reasons for the astronomical growth in subsidy amount – price of crude oil in the international market, volume of PMS consumed albeit debatable, and Naira devaluation are some of the drivers. In view of the significance of the amount committed to funding the subsidy regime, there is a need to have a close look at this scheme

Statement of problem

Nigeria has long grappled with the issue of fuel subsidies, which have imposed a significant fiscal burden on the government while distorting market incentives and hindering economic efficiency (Akinboade et al., 2018). Despite being a major oil-producing nation, Nigeria has struggled to maintain affordable fuel prices due to the reliance on fuel imports and the inefficiencies of domestic refining capacity (World Bank, 2019).

The country has been importing petrol due to its faulty refineries, thus putting untold hardship on its economy, development, and growth, with only a few cabals, corrupt officials in charge, and petrol smugglers in neighbouring countries. A series of unrest, incessant price hikes, scarcity of products, strikes in protest, and much more accompanied the production and sales of petrol in the country with the advent of civilian government in 1999.

In June 2022, the Managing Director of NNPC Limited indicated that daily consumption of PMS had increased to over 103 million litres per day and that at least 58 million litres were being smuggled. This means that smugglers and other West African countries benefit more from fuel subsidy than Nigerians. A report published by Chapel Hill Denham, estimates that 15.64 million litres of petrol are smuggled out of Nigeria daily as the retail price of Nigerian petroleum products on average is 3.7 times cheaper than those of its neighbours, and this has given smugglers undue opportunities for arbitrage. The Nigeria Customs Service also affirmed that PMS was being smuggled out of the country in large quantities after it has been subsidised by the Federal Government, adding that the petroleum product is being diverted to as far as Mali. In June 2022, the Managing Director of NNPC Limited indicated that daily consumption of PMS had increased to over 103 million litres per day and that at least 58 million litres were being smuggled. This means that smugglers and other West African countries benefit more from fuel subsidy than Nigerians. A report published by Chapel Hill Denham, estimates that 15.64 million litres of petrol are smuggled out of Nigeria daily as the retail price of Nigerian petroleum products on average is 3.7 times cheaper than those of its neighbours, and this has given smugglers undue opportunities for arbitrage. The Nigeria Customs Service also affirmed that PMS was being smuggled out of the country in large quantities after it has been subsidised by the Federal Government, adding that the petroleum product is being diverted to as far as Mali (Price Water-Coopers, 2023)

In the inauguration speech of the President Bola Ahmed Tinubu, on Monday, May 29 2023, said that the period of subsidising petrol consumption was gone, leading to an increased hike in fuel price from N185 to between N860-N1020 per litre. This has led to an increase in the price of domestic products and foreign exchange rates, thus pressuring the nation’s economy.

This research attempts to assess social and economic impacts of fuel subsidy removal on vulnerable populations. It offers new insights into analysing the effects of fuel subsidy removal on the transition of Nigerians to renewable energy sources and its implications for sustainable development. By targeting support to vulnerable populations, fuel subsidy removal can help to achieve a set of Sustainable Development Goals (SDGs).

Objectives of study

The broad objective of this study is to assess the social and economic impacts of subsidy removal on Nigerians population. Specifically, the study shall:

examine the positive impacts of fuel subsidy removal on Nigerian population;

investigate the negative impacts of fuel subsidy removal on Nigeria population; and

determine the relationship between fuel subsidy removal and sustainable development.

Research questions

The study attempted to provide answers to the following research questions:

What are the impacts of fuel subsidy removal on Nigerian population?

What are the relationships between fuel subsidy removal and sustainable development?

Research hypotheses

Ho (1): There is no impacts of fuel subsidy removal on Nigerian population.

Ho (2): There is no relationships between fuel subsidy removal and sustainable development.

Scope of the study

The study sampled the opinions of the population in both public and private sectors in Nigeria Institutions on the impacts of fuel subsidy removal on them and others in Nigeria.

Significant of the study

This study has the potential to contribute to the body of knowledge in economics, sociology, political sciences and other subject areas. The study shall also be useful for the public and private policy makers and decision makers within Nigeria economy and beyond.

LITERATURE REVIEW

This session presents the conceptual, theoretical and empirical reviews of the related literature to the study.

Conceptual review

Macroeconomic effects of fuel subsidy reforms

A positive macroeconomic implication of the removal of fuel subsidy in Nigeria is that the funds that would have been used for fuel subsidy payment could be channeled to the development of critical public infrastructure in Nigeria.  There is a consensus among academic economists that the funds used for subsidy payments can be channeled to public infrastructure spending Ozili and Obiora, 2023).

Price Water Coopers (2023) examined the short to long term impact of the removal of fuel subsidy on the Nigeria economy at large as follows.

In the short term:

Reduces government borrowing and the associated huge deficit

Fuel subsidy has been a major source of government expenditure in Nigeria, with huge sums being spent annually to keep petrol prices artificially low. This has led to the government borrowing heavily to finance the subsidy, which in turn increases the country’s deficit. By removing the subsidy, the government can reduce its borrowing and the associated huge deficit, freeing up resources for other important sectors.

Free resources for investment in other critical sectors

With the removal of fuel subsidy, the government can free up resources that would have been spent on the subsidy to invest in other critical sectors such as education, healthcare, security and infrastructure. This will not only improve the standard of living for citizens but also enhance economic growth.

Reduce/remove incentive for smuggling and associated security risk

Subsidy has created a huge incentive for smuggling of fuel to neighbouring countries where they can be sold at higher prices. This has resulted in security risks, as smuggling has also led to illegal refining, pipeline vandalism, and other criminal activities. By removing the subsidy, the incentive for smuggling will be reduced or eliminated, which will lead to a reduction in security risks associated with fuel smuggling.

In the Medium/Long term:

Stronger Naira and decline in imported inflation

The massive importation of fuel increases the demand for foreign exchange. One of the medium to long term impacts of the subsidy removal is the reduction of fuel purported consumed in Nigeria as cheap, subsidised fuel will no longer be available for smuggling. This reduced volume will translate to a reduction in demand for foreign exchange which will lead to a stronger Naira. This will also reduce imported inflation and its pass-through effect, as the cost of importing petroleum products is a major contributor to inflation in Nigeria.

Investment flow to the downstream sector

Removal of subsidy will create an enabling environment for private sector investment in the downstream sector, leading to the development of local refineries and the creation of jobs. This will enhance the country’s energy security and reduce dependence on imported petroleum products.

More profitable downstream players

Along with the increase in investment flow to the downstream sector, deregulation of the downstream sector will stimulate increased activities that will lead to more profitable downstream companies. This will result in improved tax revenue both from the companies, their employees, vendors and other players across the value chain.

Product availability

Removal of subsidy will incentivize private sector investment in the downstream sector, leading to increased local refining capacity and improved product availability.

Improved sovereign credit rating

Nigeria’s sovereign credit rating has been adversely affected by its low revenue, high debt levels, rising deficit, and vulnerability to oil price shocks. Removal of the subsidy will increase government’s revenue, reduce borrowing and the associated deficit, leading to an improvement in the country’s sovereign credit rating and lower cost of borrowing.

Leverage on the AfCFTA to legally export refined products rather than crude oil to other African countries

The African Continental Free Trade Area (AfCFTA) agreement provides a platform for Nigeria to competitively export refined petroleum products to other African countries. With the removal of fuel subsidy, Nigeria can leverage the AfCFTA agreement to increase its exports of refined products, generating foreign exchange and enhancing economic growth.

Relationship between petrol price increases, inflation and cost of living

In Nigeria, the price of petrol is considered as a major driver of the cost of living, as it is used by all including small businesses and many households given the unstable electricity supply. Therefore, any increase in fuel price could directly and immediately impact the prices of goods and services across the country. There is also the psychological impact that it tends to have because of the strong sentiment attached to cheap and affordable petrol. When petrol prices increase, small businesses tend to raise their prices to cover the increased cost of operation which can lead to higher prices for consumers. This can make it more difficult for people to afford basic necessities, lead to a decrease in the standard of living and contribute to poverty and inequality. However, previous attempts to remove the PMS subsidy had mostly been accompanied by hoarding and general scarcity which invariably amplified the impact of the price increase beyond just the subsidy removal. Overall, the relationship between petrol price increases, inflation, and the cost of living in Nigeria is complex and multifaceted. While petrol price deregulation can contribute to higher costs of living and inflation, the impact can be moderated if complemented with effective policies and well-thought implementation strategy (Price Water Coopers, 2023).

Sustainable development goals (SDGs)

The sustainable development goals (SDGs) were developed in the Post-2015 Development Agenda, 2030 as the future global development framework to succeed the Millennium Development Goals (MDGs) which were ended in 2015. The 17 SDGs are: no poverty(1), zero hunger (2), good health and well-being (3), quality education (4), gender equality (5), clean water and sanitation (6), affordable and clean energy (7), decent work and economic growth (8), industry, innovation and infrastructure (9), reduced inequality (10), sustainable cities and communities (11), responsible consumption and production (12), climate action (13), life below water (14), life on land (15), peace, justice, and strong institutions (16), partnerships for the goals (17). This agenda has 92 paragraphs. Paragraph 59 outlines the 17 Sustainable Development Goals and the associated 169 targets and 232 indicators (United Nations, 2015). Ayano (2023), investigated the impact of the first six goals of sustainable development goals on Nigeria economy from 2000 to 2020, and the result showed that goals 1, 2, 3, 5, and 6 have negative and significant relationship with economic growth in Nigeria, while only goal 4 (quality education) has a positive and significant relationship with economic growth in Nigeria. The study recommended that Nigeria government needs to revisit her formulation and implementation of policies that will address improved sustainable development goals especially in the first six sustainable development goals (Ayano, 2023).

The presence of fuel subsidy in the last decade encouraged fossil fuel-based economic activities that increase air pollution and carbon emission in Nigeria. The CO2 damage in Nigeria, which is partly attributed to fuel subsidy, rose from US$1.5bn in 1998 to US$5.23bn in 2021. The removal of fuel subsidy in Nigeria would support ongoing climate change mitigation. efforts and reduce Nigeria’s contribution to global greenhouse gas emissions by 2030. Fuel subsidy removal in Nigeria would also decrease both the demand and supply of fossil fuels, thereby reducing carbon emission in Nigeria (Omitogun et al, 2021).

Nigeria Population Growth

Nigeria’s annual population growth rate stood at 2.6 percent as in 2018. The Nigerian government has made every effort to help curb a rapid population growth. Over the past 10 years or so, they have offered free contraception and have even begun to take steps to discourage people looking for large families. The government is banking on smaller families as a means of ensuring future financial salvation. As a model for their current strategy, they look to territories like Thailand – another area with large population growth issues. The current projections for 2050 are more than 390 million total residents until there is some success in these efforts the current projections for 2050 are more than 390 million total residents until there is some success in these efforts (World Population Review, 2019).

Theoretical review

This research study is hinged on the Rational Choice Theory of Adam Smith, which states that individuals decide by weighing the potential costs and benefits of an action or behaviour. This theory explains how individuals and households make rational decisions about fuel consumption and adaptation to price changes. It assumes that people tend to act rationally and make choices that maximise their satisfaction, pleasure, cost-effectiveness, preferences, and opportunity cost despite the increase in the price of fuel, which affects the prices of all goods and commodities. Yet, Nigerians cope and adjust to the exorbitant prices of commodities, though it’s very hard. Evaluating the magnitude of income loss on households as fuel price increases becomes pertinent because households’ income cannot in any way be equated to the higher expenditure incurred by households. The cost of commodities in the market today is highly exorbitant, making it quite difficult for family members to feed as well as expected. In addition, the percentage of wage/salary spent on transportation is alarming and may take people off-balance and gradually turn them into corporate beggars if not attended to (Ogboru and Akinyotu, 2024).

Empirical review

This section of the literature reviewed some related past studies to measure the consistency of the present study with the past ones.

Sani and Hamza (2025) examined the impact of fuel subsidy removal on the performance of small and medium scale business enterprises in Jigawa State. The researchers adopted survey design and self-developed questionnaire. The owners and operators of small and medium scale businesses from the three senatorial zones were served as the subjects for the study and the data collected had been subjected to analysis using Chi-square (X²) in testing the three hypotheses The study showed that there is a significant relationship between fuel subsidy removal and the performance of small and medium scale business enterprises in the study area which is negative and having a detrimental side effect on the owners of these businesses and the household standard of living in general in terms of low patronage, high transportations cost and unaffordable power supply.

Ogwuche, Adejor, Dabish, Garbaand and Dole (2024) examined the impact fuel subsidy payments had on economic growth in Nigeria from 2005 to 2023. The authors employed secondary data  from Central Bank of Nigeria (CBN) Statistical Bullentin, the World Bank World Development Indicator (WDI) and the Nigerian Extractive Industry Transparency Initiative (NEITI) working paper. The data were converted into quarterly data for ease of analysis and estimation. Gross Domestic Product (GDP) growth rate was used as the dependent variable while Fuel Subsidy Expenditure (FSE), Exchange Rate (EXC) and Inflation Rate (INF) were the independent variables. The long run relationship among the variables was confirmed using the Johansen Co-integration technique while the Vector Error Correction Model (VECM) technique of analysis was adopted for estimation of the data. The study found that a negative significant relationship exists between fuel subsidy expenditure and economic growth in Nigeria within the period under study. The study therefore recommends a re-direction of government expenditure on subsidy to other critical area of the economy that can propel the growth of the economy.

Okwa, Okwonu, and Owoyi (2024) investigated the impact of fuel subsidy removal in Nigeria on consumer goods, transportation, and house rent in different facets. The rentier state theory was employed as the theoretical framework for analysis, and the study used the descriptive survey method with a cross-sectional procedure as the research design. The study employed the frequency distribution, and simple percentages to analyze the impacts of fuel subsidy removal. The Wilcoxon signed-rank test was used to test the formulated hypotheses at a significance level of 5%. The study affirmed that the removal of fuel subsidy increased the cost of consumer goods, since factors such as house rent and transportation which generally have effect on the cost of goods are affected, leading to poor standard of living of Nigerians.

Ogboru and Akinyotu (2024), evaluated the impact of fuel subsidy removal on family income and sustainability in Ondo City. The study adopted a descriptive survey research design. Three research questions guided the study. The study population was comprised of all household members in Ondo Metropolis. The total population of the study is two hundred and fifty-three thousand, four hundred and sixty-two (253,462). The sample size was one hundred and eighty-five (185) and was randomly selected using a simple random technique. A structured questionnaire was the research instrument used to elicit responses from the respondents. Split-half reliability was used to determine the instrument’s consistency, and a correlation coefficient of 0.76 was obtained. Data collected were analysed using descriptive statistics. The findings revealed that the fluctuation of oil prices in the international market necessitated subsidy removal, and the higher cost of transportation increases the cost of food items. The study concluded that the factors that necessitate fuel subsidy removal have a significant relationship with the possible challenges encountered by households in family sustenance. It was therefore recommended that the government’s actions, such as increasing civil servants’ wages and providing incentives for business owners, could enable them to cope with the increasing prices of commodities, offering a hopeful outlook for the future.

Oyasipe and Olukoya (2024) evaluated the impact of the elimination of gasoline subsidies on the profitability of start-up companies in Lagos State, Nigeria, using Chi-square analysis. The results showed that the elimination of fuel subsidies increased operating costs, decreased sales, lowered stock levels, and decreased the profitability of small businesses.

Yusuf (2023) examined the effects of the fuel subsidy removal on citizen’s welfare and its overall impacts on the Nigerian economy. The methodology employed in the study is descriptive design and content analysis method. The study noted that the citizens especially the poor are suffering more in form of higher transport fare and increased price of food items and other essential commodities, yet, government argued that fuel subsidy removal is in the overall interest of the Nigerian economy, insisting that funds saved from subsidy removal will be channeled to improving infrastructural facilities especially in education, transport, heath sectors and free the economy from incessant price distortions, corruption and inefficiencies. The study recommends among others; honesty, transparency and accountability by the government in expending the funds saved from fuel subsidy removal to instill good governance, improve infrastructure, increase wages of workers, tax exemptions for low income earners and agro-allied small businesses, immediate rehabilitation of moribund refineries, introduction of auto gas to reduce transportation costs, and creation of transparent social welfare programmes that will ameliorate the negative effect of the fuel subsidy removal on average citizen of Nigeria.

Ozili and Obiora (2023) using the discourse analysis methodology, offer some insight into the macroeconomic and microeconomic implications of the 2023 fuel subsidy removal in Nigeria. The positive implications are that fuel subsidy removal would free up financial resources for other sectors of the economy, incentivize domestic refineries to produce more petroleum products, reduce Nigeria’s dependence on imported fuel, increase employment, channel funds for the development of critical public infrastructure, reduce the budget deficit and generate a budget surplus in the near future, reduce government borrowing, curb corruption associated with fuel subsidy payments, increase competition, reinvigorate domestic refineries and reduce pressure on the exchange rate. The negative implications are that fuel subsidy removal may decrease economic growth in the short term, increase inflation, increase poverty, increase fuel smuggling, increase crime, increase the prices of petroleum products and loss of jobs in the informal sector. It is recommended that the government should carefully evaluate the impact of fuel subsidy removal on individuals and businesses and provide palliatives and other economic relief programs to cushion the adverse effect on individuals and firms.

Summary of Literature

Sani and Hamza (2025) examined the impact of fuel subsidy removal on the performance of small and medium scale business enterprises in Jigawa State and found that that there is a significant relationship between fuel subsidy removal and the performance of small and medium scale business enterprises. While, Okwa, Okwonu, and Owoyi (2024) investigated the impact of fuel subsidy removal in Nigeria on consumer goods, transportation, and house rent in different facets and found that the removal of fuel subsidy increased the cost of consumer goods, since factors such as house rent and transportation which generally have effect on the cost of goods are affected, leading to poor standard of living of Nigerians. In addition, Ogboru and Akinyotu (2024), evaluated the impact of fuel subsidy removal on family income and sustainability in Ondo City and found that the fluctuation of oil prices in the international market necessitated subsidy removal, and the higher cost of transportation increases the cost of food items. Also, Ogwuche et-al (2024) examined the impact fuel subsidy payments had on economic growth in Nigeria from 2005 to 2023 and found that fluctuation of oil prices in the international market necessitated subsidy removal, and the higher cost of transportation increases the cost of food items. Furthermore, Oyasipe Olukoya (2024) evaluated the impact of the elimination of gasoline subsidies on the profitability of start-up companies in Lagos State, Nigeria and found that the elimination of fuel subsidies increased operating costs, decreased sales, lowered stock levels, and decreased the profitability of small businesses. However, Yusuf (2023) examined the effects of the fuel subsidy removal on citizen’s welfare and its overall impacts on the Nigerian economy and found that that the citizens especially the poor are suffering more in form of higher transport fare and increased price of food items and other essential commodities, yet, government argued that fuel subsidy removal is in the overall interest of the Nigerian economy, insisting that funds saved from subsidy removal will be channeled to improving infrastructural facilities especially in education, transport, heath sectors and free the economy from incessant price distortions, corruption and inefficiencies. While, Ozili and Obiora (2023) offer some insight into the macroeconomic and microeconomic implications of fuel subsidy removal in Nigeria and listed both positive and negative implications of fuel subsidy removal on the Nigeria economy.

Contribution to the Study/Gaps

Having reviewed the previous works of the scholars on this subject matter, it was found that their studies focused on the implications of fuel subsidy removal on the citizens’ businesses especially small and medium enterprises (SMEs), and their access to social amenities such as education, health and transportation. This study by extension focused on the implication of fuel subsidy removal as a strategy to achieve clean energy in our environment by reducing hydrocarbon emissions for the purpose of achieving sustainable development. Population samples for this study were drawned from learned environment which made it different from previous authors that focused on the general population. In a different way to other reviewed authors, the data analysis of this study combined several techniques among which are simple percentage, chi-square test, correlation coefficient, and regression analysis. Thus, the foregoing efforts allow the authors to have a clearer implication of each variable on the Nigerians.

METHODOLOGY

Introduction

This study adopts survey design to meet its purposes. The survey design is considered appropriate because it has the advantage of effectiveness in obtaining information about personal perceptions, belief, feelings, motivations, anticipation and future plans as well as past behaviour. The survey employed author’s self-developed questionnaire. The questionnaire is divided into two major parts: Part A consists of Personal information about the respondents, while part B allows respondents to express their opinions on both the positive and negative impacts of fuel subsidy removal in Nigeria as stated by Ozili and Obiora (2023). In addition, the study relies on Rational Choice Theory of Adam Smith.

Population of study

The population of this study involves the opinion pools from working population in both private and public sectors of the Nigeria economy.

Sample/sampling method of the study

The sample for this study were obtained from the public sector working population of the Centre for Management Development (CMD), the private sector working population at the University of Ibadan-CMD postgraduate programs and the academic staff of the Christopher University – a private university situated at Mowe, Ogun State, Southwest Nigeria. The study employed a simple random sampling, which is a basic sampling technique where every individual in a population has an equal chance of being selected.

Data collection method

A research based google form was designed with a link generated by the researcher and forwarded to the various digital platforms where our respondents available in order to obtain their opinions on the issues raised on the questionnaire.  The questionnaire was structured using five (5) Likert scale measurement ranging from Strongly Agree (SA), Agree (A), Indifference (ID), Disagree (DA) and Strongly Disagree (SDA) and was checked for content and expert validity before distribution. The research instrument was checked for reliability using the alpha Cronbach test. Ambiguous questions were eliminated. At the end of the exercise, we obtained responses from thirty-seven number of respondents.

Methods and techniques for data analysis

The study employed various statistical techniques and methods such as percentages, chi square test, correlation coefficient, and regression analysis for its data analysis through the use of SPSS-23.

Ethical statement

The researcher adequately informed the respondents of the purpose of the research study in order to express their free and fair opinions without any bias. This was stated on the instruction that attached with the questionnaire.

RESULTS AND DISCUSSION

Analysis of personal information:

Figure 1: Qualification/education representation of our respondents

Source: Field survey by the author

The largest proportion of our respondents were bachelor degree and higher national diploma holders with 52.8%, follow by master degree holder with 38.9%, while the remaining 8.3% constituted the PhD degree holders.

Figure 2: Gender representation of our respondent

Source: Field survey by the author

In analysing the gender of our respondents, we found that 69.4% of our respondents were male while 30.6% of them were female, the foregoing results show that more male attended to this study than female counterparts.

Figure 3: Marital representation of our respondents

Source: Field survey by the author

Considering the marital status of our respondents, we found that 80.6% were married while 19.4% were singled. Thus, the foregoing results show that larger proportion of our respondents were married.

Figure 4: Post/position representation of our respondents

Source: Field survey by the author

Considering the post and position of our respondents at their various workplaces, we found that the largest proportion of them occupied the position of senior management development officer/ managers and others with 38.9%, follow by the position of chief management development officer with 16.7%.  In addition, our respondents include: deputy director/associate professor with 11.1%, principal management development officer and senior lecturer with 5.6%, assistant chief management development officer and lecturer 2 with 2.8%, deputy director/associate professor with 8.3%, assistant director/lecturer with 5.6%, principal management officer/assistant lecturer/senior manager with 2.8%. From the foregoing results we found that the largest proportion of our respondents occupied the position of senior management development officer/ managers while the least proportion of our respondents were principal development officers/assistant lecturer /senior manager.

Analysis of positive factors of fuel subsidy removal:

Source: Field survey by the author

Table 1 indicates that a significant majority (81.1%) of respondents (27 out of 37) either disagreed or strongly disagreed with the idea that fuel subsidy removal has reduced poverty. Only 10.8% of respondents believe it has had a positive effect on poverty reduction. The general sentiment is negative, with more than half (54.1%) strongly disagreeing, indicating a strong public perception that the policy has not improved poverty conditions. A small percentage (8.1%) remain undecided, suggesting minimal uncertainty or neutrality on the matter. The foregoing result suggests that the removal of fuel subsidies is widely perceived not to have reduced poverty in fact, the overwhelming response leans toward the opposite.

Table 2: Food security and improved nutrition due to fuel subsidy removal in Nigeria

Source: Field survey by the author

Table 2 shows that majority of our respondents disagreed with the statement that fuel subsidy removal improved food security and nutrition: Strongly Disagreed: 56.8%; Disagreed: 24.3% and Combined Disagreement: 81.1%, while very few agreed with only 1 person (2.7%) agreed, and 3 people each (8.1%), including one response without a clear label. The overwhelming response suggests that most people do not believe that the removal of fuel subsidies in Nigeria has led to improvements in food security or nutrition. This reflects general dissatisfaction with the policy in that regard.

Table 3: Good health/wellbeing due to fuel subsidy removal in Nigeria

Source: Field survey by the author

Table 3 shows that a significant majority (54.1%) strongly disagreed and 27.0% disagreed, making a combined 81.1% who do not believe the subsidy removal has improved health and wellbeing. While only 3 respondents (8.1%) agreed and 1 (2.7%) strongly agreed, totaling 10.8% with a positive view on the impact of subsidy removal on wellbeing, and a small portion (8.1%) remained undecided. The foregoing result suggests that the overwhelming majority of respondents perceive the removal of fuel subsidies as detrimental to health and wellbeing, possibly due to rising costs of transportation, goods, and healthcare. Only a small minority see any positive impact.

Table 4: Improved quality of education due to fuel subsidy removal in Nigeria

Source: Field survey by the author

Table 4 shows that a significant majority of respondents (19 out of 37) (51.4%) strongly disagreed with the statement. This suggests that more than half of the respondents believe that the fuel subsidy removal has not improved the quality of education. While another notable portion (9 respondents) (24.3%) disagreed, reinforcing the general negative perception. Combining both “disagree” and “strongly disagree” gives 75.7% of respondents who reject the idea of educational improvement due to subsidy removal.  In addition, 5 respondents (13.5%) were undecided, indicating a degree of uncertainty or lack of sufficient information to form a definite opinion. In contrary, only 3 respondents agreed and 1 strongly agreed, together forming a small minority (10.8%) who believe that the removal of the fuel subsidy may have had a positive impact on education quality. The foregoing result overwhelmingly suggests that most respondents do not perceive any improvement in the quality of education as a result of fuel subsidy removal in Nigeria. The high percentage of disagreement reflects skepticism or dissatisfaction with how subsidy removal has affected the educational sector.

Table 5: Affordable clean energy due to fuel subsidy removal in Nigeria

Source: Field survey by the author

Table 5 indicates that majority of our respondents strongly disagreed (43.2%) with the notion that subsidy removal has resulted in affordable clean energy, a significant portion also disagreed (24.3%), bringing the total disagreement to 67.5%. While nearly one-fifth (18.9%) of our respondents were unsure or neutral on the issue. A small percentage (2.7%) of our respondents agreed that fuel subsidy removal contributed to affordable clean energy. The foregoing result suggests that removing fuel subsidies has not been widely perceived as a driver of affordable clean energy in Nigeria. A combined 67.5% of respondents disagreed or strongly disagreed, implying skepticism or dissatisfaction with the policy’s effectiveness in promoting clean energy access.

Table 6: Free up financial resources for other sectors of the economy

Source: Field survey by the author

Table 6 presents respondents’ views on whether financial resources should be freed up for other sectors of the economy. The responses show a mixed and polarized opinion on the matter. A significant portion of respondents agreed (29.7%) with the statement, indicating some support for the idea. However, an equally large group strongly disagreed (29.7%), suggesting strong opposition. Additionally, 16.2% disagreed, bringing the total opposition to 45.9%, which outweighs the 35.1% who were in favor (combining agreed and strongly agreed). Meanwhile, 13.5% of the respondents remained undecided, indicating a level of uncertainty or lack of sufficient information on the issue. This distribution reveals that while some respondents believe reallocating financial resources could benefit other sectors, a larger group is skeptical or outright opposed. The high percentage of disagreement suggests that the idea may be controversial or not well understood, and may require further communication, explanation, or evaluation of its potential impacts.

Table 7: Incentivize domestic refineries to produce more petroleum products

Source: Field survey by the author

Table 7 indicates that 37.8% (Agreed + Strongly Agreed) support the idea of incentivizing domestic refineries. This suggests that more than one-third of the respondents recognize potential benefits in boosting local production. While a total of 40.5% (Disagreed + Strongly Disagreed) are opposed to the idea. Notably, 24.3% strongly disagreed, indicating firm resistance or skepticism regarding the policy. In addition, 13.5% were undecided, showing that some respondents are either unaware of the issue’s implications or believe more information is needed. The responses show no overwhelming consensus. While a fair number support incentivizing domestic refineries, opposition is slightly higher. This split suggests that the policy may be viewed as promising but possibly controversial, perhaps due to concerns about implementation, economic impact, or trust in refinery capacity. Further dialogue and clarity on how incentives would be managed could help address public hesitation.

Table 8: Reduce Nigerians dependence on imported fuel

Source: Field survey by the author

Table 8 shows respondents agreement (Strongly Agreed + Agreed) with combined 15 respondents (40.5%) support reducing Nigeria’s dependence on imported fuel. This shows a moderate level of agreement. While some respondents disagreed (Strongly Disagreed + Disagreed) with a total of 14 respondents (37.8%) are against the idea, suggesting significant opposition. While 6 respondents (16.2%) were unsure, reflecting some level of uncertainty or lack of information on the issue. The responses are fairly split. While slightly more respondents agreed with reducing reliance on imported fuel (40.5%), a significant portion disagrees (37.8%), and others remain undecided. This indicates mixed opinions among the participants and suggests the need for more awareness or policy discussion on the issue.

Table 9: Increase employment

Source: Field survey by the author

Table 9 presents data on respondents’ views regarding the statement “Increase employment”, showing how many participants selected each response category and the corresponding percentages. The largest group (15 respondents) strongly disagreed with the statement. This indicates a significant portion of participants do not believe that subsidy removal leads to increased employment. Among our respondents 8 of them disagreed, reinforcing the negative perception. Together with those who strongly disagreed, this makes 62.1% who do not support the idea that employment is increased. While 6 respondents were neutral or unsure, showing a moderate level of uncertainty or lack of strong opinion, only 4 respondents in total (2 for each category) believed that employment is increased, indicating low support for the idea.

Table 10: Channel funds for the development of critical public infrastructure

Source: Field survey by the author

Table 10 indicates that there is significant disagreement among respondents regarding the channeling of funds toward the development of critical public infrastructure. While 32.4% of respondents support the idea (either agreeing or strongly agreeing), a larger proportion (43.2%) oppose it. Additionally, 16.2% remain undecided, reflecting a notable level of uncertainty or indecision on the issue. This distribution suggests that the proposal to channel funds for infrastructure development lacks broad consensus and may face resistance or require further engagement, clarification, or education to address the concerns and uncertainties of stakeholders.

Table 11: Reduce the budget deficit and generate a budget surplus in the near future

Source: Field survey by the author

Table 10 shows that 16 respondents (43.2%) are in favor of reducing the deficit and achieving a surplus. This includes: 13 (35.1%) who agreed, 3 (8.1%) who strongly agreed. In addition, 15 respondents (40.5%) are opposed to the idea. This includes:8 (21.6%) who disagreed7 (18.9%) who strongly disagreed while 4 respondents (10.8%) were neutral or undecided on the matter. Overall, the findings suggest that while there is moderate support for pursuing a budget surplus, there is also notable opposition, highlighting the complexity and possible controversy surrounding fiscal policy decisions. This division points to the need for further dialogue, clarification of potential impacts, and possibly more public education on the implications of budget deficit reduction strategies.

Table 12: Reduce government borrowing

Source: Field survey by the author

Table 12 presents the frequency and percentage distribution of respondents’ opinions on the statement that fuel subsidy removal reduces government borrowing. From the above table 24.3% agreed and 13.5% strongly agreed (combined 37.8%) in support of reducing government borrowing. On the other hand, 21.6% disagreed and 24.3% strongly disagreed (combined 45.9%) opposed to the idea. While 13.5% of respondents were undecided, indicating some uncertainty or lack of strong opinion on the issue. The relatively high percentages of “Strongly Agreed” and “Strongly Disagreed” responses suggest that this is a polarizing issue, with people holding strong opposing views. Policymakers or researchers should note the divided opinions. While a substantial portion supports reducing government borrowing, an almost equal or slightly larger group is against it, suggesting that any policy measures in this area may face resistance or require more public engagement and education.

Table 13: Curb corruption associated with fuel subsidy payments

Source: Field survey by the author

Table 13 indicate that respondents strongly disagreed (27.0%) and disagreed (13.5%): together, 40.5% of respondents do not believe that curbing corruption is associated with fuel subsidy payments. While agreed (24.3%) and Strongly Agreed (13.5%): Combined, 37.8% of respondents do believe there is an association. Finally, 16.2% of respondents were undecided. The polarized views suggest that more awareness and communication around the impact of fuel subsidies on corruption could help shape more informed opinions. It also points to a need for greater trust-building in the policies and reforms around fuel subsidies.

Table 14: Increase competition

Source: Field survey by the author

Table 14 indicates that 10.8% of respondents strongly agreed, 35.1% of respondents agreed, 16.2% disagreed, 13.5% strongly disagreed, while 13.5% were undecided. Overall, the result indicates a favorable view of increased competition, but with a notable portion of individuals expressing uncertainty or opposition, highlighting that the impact of competition may depend on various factors or contexts.

Table 15: Reinvigorate domestic refineries and reduce pressure on the exchange rate

Source: Field survey by the author

Table 15 represents survey data on opinions regarding the statement that fuel subsidy removal “Reinvigorate domestic refineries and reduce pressure on the exchange rate.” The table shows that 5 (13.5%) of our respondents strongly agreed with the statement, 12(32.4%) agreed with the statement. While 5(13.5%) respondents were undecided about the statement, 5(13.5%) of our respondents disagreed with the statement, and finally, 7 (18.9%) of them strongly disagreed with the statement. Based on the data from Table 15, the majority of respondents appear to have reservations or strong opposition to the idea of reinvigorating domestic refineries to reduce pressure on the exchange rate. While 45.9% of respondents either agree or strongly agree with the statemen, a larger proportion, 54.1%, disagree or strongly disagree. This suggests that there is significant skepticism or concern about the effectiveness or feasibility of such a policy.

Analysis of the negative factors of fuel subsidy removal

Table 16:  Decrease economic growth in the short term

Source: Field survey by the author

Table 16 presents survey responses regarding the statement, “decrease economic growth in the short term.” as a result of removal of fuel subsidy. The table indicates that 10 (27%) respondents strongly agreed with the statement, indicating a significant portion of respondents believe that economic growth will decrease in the short term. In addition, 15 (40.5%) respondents agreed, adding to the majority who think economic growth will decrease, while 4 (10.8%) respondents were uncertain and chose the “undecided” option. However, 3 (8.1%) respondents disagreed, indicating that a smaller number of respondents don’t believe economic growth will decrease and 2(5.4%) respondents strongly disagreed, meaning they don’t believe in the short-term decrease in economic growth. A majority of respondents (67.5% total) either agreed or strongly agreed that economic growth will decrease in the short term, while minority of them were undecided.

Table 17: Increase inflation/general price level

Source: Field survey by the author

Table 17 provides a breakdown of responses regarding the perception of increasing inflation/general price levels. The majority (54.1%) of participants strongly agreed that inflation/general price levels have increased. This suggests a strong perception of rising prices among the respondents, 21.6% of the respondents agreed with the statement, though they didn’t feel as strongly as those who strongly agreed, 2.7% of the respondents disagreed, indicating a very small proportion of people who did not think inflation has increased, An equal percentage (8.1%) strongly disagreed, suggesting that there is a small group of respondents who feel inflation has not increased at all, while a small portion (5.4%) of the respondents were undecided on the issue. This suggests that inflation is widely perceived as a significant issue by the majority of the respondents.

Table 18: Increase poverty

Source: Field survey by the author

Table 18 presents the results of a survey on the statement “Increase poverty,” showing how participants responded to it. A significant portion of respondents (14 out of 37, or 37.8%) strongly agreed that the statement about increasing poverty is valid. This is the largest group, indicating a strong belief in the association. 3 respondents (35.1%) agreed with the statement, further emphasizing the general consensus that increasing poverty is a concern, although slightly less intense than the “Strongly Agreed” group. 4 respondents (10.8%) were undecided, suggesting that they neither agreed nor disagreed with the statement. This shows a moderate level of uncertainty or neutrality. 2 respondents (5.4%) strongly disagreed with the statement, showing that a small portion of the group does not see a direct link to increasing poverty. Only 1 respondent (2.7%) disagreed, which is a very small proportion of the total group. The majority of respondents (73.0% combined between “Agreed” and “Strongly Agreed”) believe that the statement about increasing poverty is valid. Very few people disagreed or strongly disagreed, indicating a general agreement with the concern. The undecided group is relatively small but still noticeable, indicating a degree of uncertainty in the population surveyed

Table 19: Increase fuel smuggling

Source: Field survey by the author

Table 19 depicts responses regarding the increase in fuel smuggling: 4 respondents (10.8%) strongly agreed that fuel smuggling has increased; 1 respondent (2.7%) agreed that fuel smuggling has increased; 9 respondents (24.3%) disagreed with the statement; 9 respondents (24.3%) strongly agreed that fuel smuggling has increased; 4 respondents (10.8%) strongly disagreed with the statement; and 10 respondents (27%) were undecided about whether fuel smuggling has increased. The survey results on the increase in fuel smuggling indicate a divided opinion among respondents. While a notable portion of respondents strongly agree (24.3%) or agree (2.7%) that fuel smuggling has increased, there is also significant disagreement, with 24.3% strongly disagreeing and 10.8% strongly disagreeing. The largest group, however, consists of respondents who are undecided (27%), indicating uncertainty or a lack of definitive knowledge on the issue.

Table 20: Increase crime

Source: Field survey by the author

This table presents the responses of 37 participants regarding their opinions on whether crime has increased due to removal fuel subsidy. The highest number (35.1%) of respondents strongly agreed that crime has increased, 32,4% of them agreed with the statement, making it the second most common response, 16,2% of them were unsure about the increase in crime. While only a small fraction of the respondents disagreed (5.4%) and strongly disagreed (2.7%). The data indicates that the majority of respondents perceive an increase in crime, with over two-thirds expressing agreement. This could reflect growing concern in the community or greater awareness of criminal activity.

Table 21: Increase the prices of petroleum products

Source: Field survey by the author

This table presents the responses of 37 respondents regarding whether they support an “increase in the prices of petroleum products” as a result of fuel subsidy removal. The majority (73.0%) of respondents (27 out of 37) strongly agreed with increasing the prices of petroleum products, indicating a strong level of support. A smaller portion (5 respondents) agreed (5.4%), suggesting moderate support, while just 1 (2.7%) respondent was undecided, showing most respondents had a clear opinion. The foregoing results clearly indicates that the majority of respondents support the increase in the prices of petroleum products as a result of fuel subsidy removal in Nigeria.

Table 22: Loss of jobs in the informal sector

Source: Field survey by the author

Table 22 presents respondents’ views on “loss of jobs in the informal sector.” The responses are categorized based on levels of agreement, along with their frequencies and percentage. A majority (22 out of 37 respondents) with 59.5% strongly agreed that there has been a loss of jobs in the informal sector as a result of fuel subsidy removal in Nigeria. An additional 9 (24.3%) respondents agreed with the statement, bringing the total agreement (strongly agreed + agreed) to 83.8% of the sample. This further supports the perception that job losses are prevalent in the informal sector as result of fuel subsidy removal in Nigeria. A small portion, 3 (8.1%) respondents were unsure or neutral, indicating that only a minor fraction lacked a definite opinion. However, 2 respondents (5.4%) disagreed (without indicating strength). And 1 person (2.7%) strongly disagreed. This suggests very limited opposition to the idea of job loss in the informal sector as a result of fuel subsidy removal in Nigeria. The result shows a strong consensus among respondents that the informal sector has experienced job losses, with over 80% in agreement due to fuel subsidy removal in Nigeria. Very few participants disagreed or remained undecided, highlighting a widespread perception of economic vulnerability in the informal job market.

Chi-square test

Table 23: Chi-square relationship test as a result of fuel subsidy removal in Nigeria

Table 23 indicates the relationship test between variables as a result of the fuel subsidy removal in Nigeria. The following relationships were found to be significant: Food  security/improved nutrition and good health/well-being; Free up financial resources for other    sector and reduce budget deficit; Free up financial resources for other  sector and improved quality education; Free up financial resources for other sector and good health/well-being; Free up financial resources for other sector and development of public Infrastructure; Price of petroleum product and increase in crime; Loss of job and increase in crime; Free up financial resources for other  sector and incentivize domestic refineries, Free up financial resources for other sector and reduce dependence on imported fuel; Free up financial resources for other sector and reduce government borrowing; and finally Free up financial resources for other  sector and reduce pressure on exchange rate.  While the following relationships shown insignificant: Gender and affordable clean energy; Education qualification and poverty reduction; and finally, Education qualification and increase employment.

DISCUSSION

The study found that the general sentiment is negative, with more than half (54.1%) strongly disagreeing, indicating a strong public perception that the subsidy removal policy has not improved poverty conditions. Thus, the foregoing result agreed with the findings of Ayano (2023) who posited that no poverty (1), zero hunger (2), good health and well-being (3), gender equality (5), clean water and sanitation (6) have negative and significant relationship with economic growth in Nigeria. In addition, the work of Ozili and Obiora (2023), supported that fuel subsidy removal may decrease economic growth in the short term, increase inflation, increase poverty, increase fuel smuggling, increase crime, increase the prices of petroleum products and loss of jobs in the informal sector.

The study found that the overwhelming response suggests that most people do not believe that the removal of fuel subsidies in Nigeria has led to improvements in food security or nutrition. This reflects general dissatisfaction with the policy in that regard. The foregoing results complied with the findings of Yusuf (2023) in his study on the effects of the fuel subsidy removal on citizen’s welfare and its overall impacts on the Nigerian economy where he noted that the citizens especially the poor are suffering more in form of higher transport fare and increased price of food items and other essential commodities.

The study found that the overwhelming majority of respondents perceive the removal of fuel subsidies as detrimental to health and wellbeing, possibly due to rising costs of transportation, goods, and healthcare. The foregoing finding agreed with the works of Yusuf (2023), Okwa, Okwonu, and Owoyi (2024), as well as Ogboru and Akinyotu (2024) which affirmed that the removal of fuel subsidy increased the cost of consumer goods, since factors such as house rent and transportation which generally have effect on the cost of goods are affected, leading to poor standard of living of Nigerians.

The study found that removing fuel subsidies has not been widely perceived as a driver of affordable clean energy in Nigeria. A combined 67.5% of respondents disagreed or strongly disagreed, implying skepticism or dissatisfaction with the policy’s effectiveness in promoting clean energy access. Thus, the foregoing finding disagreed with the posits of Omitogun et al (2021), which stated that the removal of fuel subsidy in Nigeria would support ongoing climate change mitigation. efforts and reduce Nigeria’s contribution to global greenhouse gas emissions by 2030.

The study found that a majority of respondents (67.5% total) either agreed or strongly agreed that economic growth will decrease in the short term with the removal of fuel subsidy. The foregoing findings agreed with the works of Okwa, Okwonu, and Owoyi (2024), which affirmed that the removal of fuel subsidy increased the cost of consumer goods, since factors such as house rent and transportation which generally have effect on the cost of goods are affected, leading to poor standard of living of Nigerians.

The study found that the largest group strongly disagreed with the statement. that subsidy removal leads to increased employment. Thus, the foregoing result agreed with the work of San and Hamza (2025), which showed that there is a significant relationship between fuel subsidy removal and the performance of small and medium scale business enterprises in the study area which is negative and having a detrimental side effect on the owners of these businesses and the household standard of living in general in terms of low patronage, high transportations cost and unaffordable power supply. The foregoing therefore negative impacts of fuel subsidy removal on business owners will not attract increase employment.

CONCLUISION AND RECOMMENDATIONS

Conclusion

In an attempt to assess the social and economic impacts of subsidy removal on Nigerians population, the author provided answers to the following specific objectives: examine the factors that lead to positive impacts of fuel subsidy removal on Nigerian population and found that some of the established positive impacts recorded negative impacts of fuel subsidy removal on Nigeria population among the factors under study; investigate the negative impacts of fuel subsidy removal on Nigeria population and found that the results has the combination of negative and positive impacts among the factors under study. and finally analyze the relationship between fuel subsidy removal and sustainable development which found that fuel subsidy removal has negative relationship with sustainable development among the factors under the study.

Recommendations

Having found the foregoing results, the author therefore made the following recommendations:

That government should find alternative ways rather than removal of fuel subsidy only so as to improve the following social and economic factors such as increase inflation, increase poverty, increase fuel smuggling, increase crime, increase the prices of petroleum products and loss of jobs in the informal sector.

That government should not rely on the removal of fuel subsidies in Nigeria as a mean of improving food security or nutrition.

That government should note that the removal of fuel subsidies is detrimental to health and wellbeing, possibly due to rising costs of transportation, goods, and healthcare. Thus, they need to use some level of price control to manage the market prices.

That government should identify that removing fuel subsidies has not been widely perceived as a driver of affordable clean energy in Nigeria.

That government should find a safe net because economic growth will decrease in the short term with the removal of fuel subsidy.

That government should effectively manage labour market because subsidy removal leads to increased unemployment.

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