IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH (IJSSMR )

E-ISSN 2545-5303
P-ISSN 2695-2203
VOL. 9 NO. 5 2023
DOI: https://doi.org/10.56201/ijssmr.v9.no5.2023.pg63.81

---

The Impact of Fuel Subsidy on the Nigerian Economy in the Fourth Republic: An Analysis

Rex Oforitse ARUOFOR, Daniel Risiagbon OGBEIDE

---

Abstract

Fuel Subsidy means that a fraction of the price that consumers are supposed to pay to enjoy the use of petroleum products is paid by government so as to ease the price burden. Ever since President Goodluck Jonathan mooted the removal of fuel subsidy in 2012, the debate has been whether or not to remove the fuel subsidy. The history of fuel subsidies dates back to the '70s, when they were first introduced in Nigeria in response to the oil price shock in 1973. However, different regimes have been subsidizing fuel imports with Huge budgetary provisions but the actual amounts expended on Fuel subsidy and paid to Independent Oil Marketers had remained a myth. Besides, the actual impact of fuel subsidy on the Nigerian economy had become a subject of theoretical debate. This study is a bold attempt to determine and estimate the annual levels of fuel subsidy since 1981 and to empirically evaluate its impact on the Nigeria economy on the one hand as well as measure the shifts and changes in the economy under different democratic political regimes on the other, using the Total Differential Modeling Approach (Ecostatometrics). The result is that Fuel subsidy still holds a lot of promise for the Nigerian economy but its administration needs major reforms. It requires greater transparency and accountability among its operatives, both on the Government side and on the part of the Independent Marketers.

keywords:

Total Differential Modeling Approach, Fuel Subsidy, Impact, Democratic Political Regimes, Shifts and Changes

---

References:

Adeyoju, S. K. (1975). Forestry and the Nigerian economy. Ibadan University Press, Nigeria.

Agbonkese, A. O., Ogbeifun, M. I. and Umueme, B. A. (2016). The impact of deregulation of the
Downstream sector of petroleum industry on economic growth of Nigeria. Igbinedion
University Journal of Arts and Social Sciences, Vol.2, No. 1, pp. 194-231.

Aruofor, R. O. (2001). Economic Systems Engineering: An Essay in quantitative models and
methods for development planning. Thy Kingdom Press (Subsidiary of Systemod Nigeria
Ltd.),Miscellaneous Publishers, Sapele, Nigeria, 2001.

DOWNLOAD PDF

---

Back