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

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Listed:
  • Ayano David Ayanniyi

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

  • Sheidu Kamoru Olanrewaju

    (Department of Social Sciences Education, Faculty of Education, University of Lagos)

Abstract

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.

Suggested Citation

  • Ayano David Ayanniyi & Sheidu Kamoru Olanrewaju, 2025. "Effective Management of Fuel Subsidy Removal: A Nexus for Sustainable Development in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(5), pages 6307-6329, May.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-5:p:6307-6329
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    References listed on IDEAS

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    1. Justinah O. Ogboru & Oseyemi E. Akinyotu, 2024. "Evaluation of the Impact of Fuel Subsidy Removal on Family Income and Sustainability in Ondo City, Nigeria," International Journal of Home Economics, Hospitality and Allied Research, Department of Home Economics & Hospitality Management Education, University of Nigeria, Nsukka, vol. 3(1), pages 117-128.
    2. Ozili, Peterson K, 2023. "Implications of fuel subsidy removal on the Nigerian economy," MPRA Paper 118798, University Library of Munich, Germany.
    3. Lanjouw, Peter & Ravallion, Martin, 1999. "Benefit Incidence, Public Spending Reforms, and the Timing of Program Capture," The World Bank Economic Review, World Bank, vol. 13(2), pages 257-273, May.
    4. Benedict Clements & Sanjeev Gupta & Masahiro Nozaki, 2013. "What happens to social spending in IMF-supported programmes?," Applied Economics, Taylor & Francis Journals, vol. 45(28), pages 4022-4033, October.
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