Evolution, Dimensions and Effects of Subsidy Removal on Socio-Economic Groups in Nigeria

The fuel subsidy regime in Nigeria started in 1977 when Olusegun Obasanjo’s military administration established a Price Control Board. The Board made it illegal to sell petroleum products (PMS) above the regulated price in any part of the country. The reason was to make PMS affordable for Nigerians, and it was operated by the Nigerian National Petroleum Corporation (NNPC). This was not a problem until the types and trends of consumption rose to epic proportions of N53.58 million in 1977 to N1.217 trillion in 2014, and further to N6.720 trillion in 2023. It then generated public outcry and contentious national debate until President Bola Ahmed Tinubu (BAT) abruptly pronounced its removal on 29 May 2023, and it had grave effects on the people and industries. This study, therefore, examined the effects of fuel subsidy removal on different socio-economic groups and sectors between 2023 and 2024 in Nigeria. It adopted the ‘social exchange’ theoretical framework propounded by George Homans, and applied desktop method of data collection. The study found that the reform was poorly conceived, planned, and implemented, and caused tremendously negative effects on the groups and sectors. The effects were higher than the benefits. It recommended a reappraisal of the policy for government to ensure that reforms conform to its primary objectives of improving the welfare and security of the people.