ECONOMIC IMPACT ASSESSMENT OF FUEL SUBSIDY REMOVAL IN NIGERIA: EFFECTS ON INFLATION, POVERTY, AND ECONOMIC GROWTH

Abstract

The removal of fuel subsidy in Nigeria has generated widespread debate on its economic implications. This study examined the economic impact of fuel subsidy removal on inflation, poverty, and economic growth in Nigeria. Using a descriptive research design, secondary data were sourced from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS), World Bank, and International Monetary Fund (IMF). Findings revealed that subsidy removal has contributed to rising inflationary trends, which in turn exacerbated poverty levels, particularly among low-income households. However, the policy also presents opportunities for fiscal sustainability, as it frees up resources that can be redirected to critical sectors of the economy. The study concluded that while subsidy removal creates short-term economic hardships, it offers potential for long-term growth and development if accompanied by transparent governance, social protection measures, and targeted investments. Recommendations were made for strengthening social safety nets, promoting public accountability, and developing alternative energy policies to mitigate the negative impacts on vulnerable groups while sustaining economic reforms.