Implications of Fuel Subsidy Removal on the Nigerian Economy

Abstract

The purpose of this chapter is to discuss the implications of the 2023 fuel subsidy removal in Nigeria. Using the discourse analysis methodology, the authors offer some insight into the macroeconomic and microeconomic implications of the 2023 fuel subsidy removal in Nigeria. The positive implications are that fuel subsidy removal would free up financial resources for other sectors of the economy, incentivize domestic refineries to produce more petroleum products, reduce Nigeria's dependence on imported fuel, increase employment, channel funds for the development of critical public infrastructure, reduce the budget deficit and generate a budget surplus in the near future, reduce government borrowing, curb corruption associated with fuel subsidy payments, increase competition, reinvigorate domestic refineries, and reduce pressure on the exchange rate.