This study critically examines the political economy of fuel subsidy removal in Nigeria, situating the reform within broader debates on state capacity, fiscal governance, and distributive politics. The Bayart’s notion of extraversion and Political Settlements theory provide the central interpretive lenses, highlighting how external pressures and internal elite bargains has shaped policy directions. These are further situated within Rentier State and Dependency perspectives, which frame the structural constraints of resource dependence and external financial influence. To capture the welfare and redistributive dimensions, insights from the public-choice and distributional incidence literature are applied. The research methodologically adopts a qualitative political economy approach enriched with descriptive-analytical elements. Data were drawn from a wide array of sources, including government reports from the Nigerian National Petroleum Company Limited (NNPCL), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and the Budget Office, as well as international publications from the IMF and World Bank, and empirical data from the National Bureau of Statistics and Reuters. Media analyses and secondary academic literature provided additional depth and critical perspectives. Using triangulation, the study combines content analysis of policy documents with critical discourse analysis of reform narratives against observable socioeconomic outcomes. The findings reveal that while subsidy removal is justified in terms of fiscal sustainability, its implementation reflects elite bargains and external pressures more than equitable welfare outcomes, with ordinary citizens bearing disproportionate costs. The study concludes that sustainable reform requires reconciling fiscal rationality with inclusive distributive frameworks.
Anthony Rufus (Tue,) studied this question.