Keywords: Fuel Subsidy; Nigeria; Palliative; Policy; Socio-economic Development

Abstract

Subsidy is any amount of money paid by a government or an organization to lower the cost of services or the cost of producing goods so that their prices can be kept low. In Nigeria, number of public policies have been put in place over the years with the aim of promoting prosperity and socio-economic development, but these policies appear to have fallen short of their goals. This study critically examines the policy of removing fuel subsidy in Nigeria and its implications for socioeconomic development. Hence, the main objectives of the study are to assess the rationale behind the fuel subsidy removal policy in Nigeria and to evaluate the challenges associated with subsidy removal. Using secondary data source with qualitative approach, this study synthesizes scholarly articles, journals etc. to examine the rationale behind the policy shift, the immediate and long-term socio-economic impacts, and the effectiveness of compensatory measures such as palliative programmes. The findings indicate that fuel subsidy removal has significant implications for price stability, inflationary trends, income distribution and social welfare outcomes. The study concluded that government should consider implementing customized social safety nets and assistance programs to assist vulnerable groups, including low-income households and small businesses. The study also made recommendations for the creation of inclusive policies that would strike a balance between economic reform and equitable development.

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Published: 2026

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