The Microeconomic and Macroeconomic Implications of Fuel Subsidy Removal in Nigeria

Abstract

This paper examines the microeconomic and macroeconomic implications of fuel subsidy removal in Nigeria 2023 while adopting a desk review method using discourse analysis methodology. The paper offers some insights into the implications of fuel subsidy, drawing from the interplay of economic, political, environmental, and societal factors necessitating a holistic approach. The removal of fuel subsidy in Nigeria has prompted a profound shift with far-reaching implications across economic, social, and environmental circles. Nigeria, as an oil-dependent economy has long relied on fuel subsidy to ensure affordable fuel prices for its citizens. However, in recent years, the country has faced numerous challenges including the rising rate of inflation, unemployment and increase in poverty rates. Based on these challenges, the decision to remove petroleum subsidy has had a significant impact on the economy. To achieve the objective highlighted in the paper, the background of the problem was discussed, review of related literature was undertaken, and possible recommendations were suggested towards mitigating the severe effect of fuel subsidy removal on the general living standard of the citizens and the economy.