Fuel Subsidy Removal in Nigeria: Problems and Prospects

This study explains the need for fuel subsidy removal and its impact on Nigerians. The policy of fuel subsidy removal was informed by the need to reinvest the huge amount of money that was formerly used for subsidy into the critical sectors of the economy. The main objective of the study is to determine the effect of the removal of fuel subsidy on Nigerians. Specific objectives include to: (i) ascertain the effect of fuel subsidy removal on Nigerians, especially the low income households.(ii) identify the problems created by the removal of fuel subsidy (iii) proffer solutions to the problems of the removal of fuel subsidy in Nigeria. The theory used to explain the removal of fuel subsidy is ‘Public Choice theory.’’ The method ofdata collection is secondary source. Some of the major findings of the study are that: the introduction of fuel subsidy has brought economic hardship to Nigerians, especially the low income house holds. The government has not done enough to address the problems caused by the introduction of fuel subsidy removal in Nigeria. Similarly some of the major recommendations are that the government should implement a Social Safety Net Program, by Providing financial assistance to vulnerable populations, such as the poor, elderly, and disabled, to help them cope with the increased cost of living.Government should provide support for small businesses, such as loans and grants, to help them cope with the increased cost of doing business, occasioned by the fuel subsidy removal.