FUEL SUBSIDY REMOVAL AND POVERTY IN NIGERIA: A LITERATURE REVIEW
Abstract
Fuel subsidies in Nigeria have been a contentious issue for decades. However, the recent removal of fuel subsidy by President Bola Ahmed Tinubu led administration has resulted in a looming fuel shortage crisis and left millions of Nigerians terrified about the knock-on effects on their daily lives. Meanwhile, the removal of the fuel subsidy has led to increased prices for transportation and commodities, adding to economic hardships, businesses struggle as they are forced to spend more money on fuel consumption. Hence, this paper examined fuel subsidy removal and poverty in Nigeria. By utilizing the theory of price elasticity of demand, the paper aimed to examine the rationale behind the fuel subsidy removal, the socio-economic implications of fuel subsidy removal and suggested palliative measures to cushion the effects of fuel subsidy removal in Nigeria. By utilizing content analysis method, the paper reveals factors such as private sector participation in the importation of petroleum products, availability of petrol at all times for all Nigerians and permanently banishing queues from petrol stations across the nation and free the country from the endless pains and sufferings that come with fuel scarcity, revenue generation, stimulating economic development among others as rationales behind fuel subsidy removal. The paper equally pointed at high cost of living, high rate of crime, and increase in poverty level as people and businesses struggle for survival among other socioeconomic implications of fuel subsidy removal in Nigeria. The paper concluded by recommending rural electrification, increase in the minimum wage and food importation/distribution among other feasible palliatives as suggested measures to cushion the effects of fuel subsidy removal in Nigeria.
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