Review of Fuel Subsidy Reforms and Their Socioeconomic, Political and Environmental Implications

Folorunso; Joy Oluwatomi

doi:10.56201/ijgem.vol.11.no7.2025.pg72.83

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Review of Fuel Subsidy Reforms and Their Socioeconomic, Political and Environmental Implications

Folorunso, Joy Oluwatomi

Abstract

This paper reviews Nigeria’s fuel subsidy reforms from 2012 to 2024, examining their socioeconomic, environmental, and political implications. Fuel subsidies, introduced in the 1970s, have strained Nigeria’s budget, reaching N10 trillion in 2022, while contributing to air pollution, inequality, and corruption. The fuel subsidies reform aimed to reduce fiscal burdens and emissions, but yielded mixed findings. The study utilised a narrative qualitative review, supported by secondary Environmental Performance Index (EPI) trend analysis, synthesised data from peer-reviewed journals, government reports, and NGOs (2012–2024). The review findings showed that subsidy removal increased fuel prices, reducing consumption and improving air quality temporarily (EPI peak of 58.27 in 2016), but reinstatements in 2021 and 2024 reversed gains (EPI low of 28.30 in 2022). Socioeconomically, reforms worsened poverty for low-income households, while macroeconomic stability improved. Politically, corruption and distrust hindered public support, necessitating transparency and social safety nets. Environmentally, reduced emissions were limited by inadequate renewable energy infrastructure. Global comparisons, such as Indonesia’s gradual reforms, suggest phased implementation and public communication as critical for success. This review paper recommends redirecting subsidy savings to renewable energy (solar, biomass), strengthening governance, and enforcing stricter air quality regulations to balance economic growth with environmental sustainability. Future research should explore long-term environmental impacts and regional differences. This study highlights the need for holistic policies integrating economic, social, and environmental goals to achieve sustainable development in Nigeria.

Keywords

Fuel SubsidyEnvironmental ImpactSocioeconomic ImpactEnvironmental

References

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Review of Fuel Subsidy Reforms and Their Socioeconomic, Political and Environmental Implications

Abstract

Keywords

References

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