Fuel Subsidy Removal and Macroeconomic Stability in Nigeria

Nwenyi Francis Onwe; Okon; Ekanem Nsikhe; Abel-Tariah Emmanuel Onate

doi:10.56201/ijebm.vol.12.no8.2026.pg260.270

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Fuel Subsidy Removal and Macroeconomic Stability in Nigeria

Nwenyi Francis Onwe, Okon, Ekanem Nsikhe, Abel-Tariah Emmanuel Onate

Abstract

This study examined the impact of fuel subsidy removal on economic stability in Nigeria, using time series data spanning 1992 to 2025. The removal of fuel subsidy has remained one of the key policy issues in Nigeria, given the country's heavy reliance on oil revenue and the far-reaching implications of such reforms on economics stability, inflation, and household welfare. The objective of the is to examine the effect of fuel subsidy removal on inflation and to analyze its relationship with household consumption pattern in Nigeria. The study was anchored on the Keynesian Economic Theory and adopted an ex-post-facto research design. Secondary data on inflation rate, Government fuel subsidy expenditure, household consumption pattern, and exchange rate were sourced from the Central Bank of Nigeria Statistical Bulletin, the World Bank, and the National Bureau of Statistics. The Ordinary Least Squares technique was employed to estimate the multiple regression model, Findings revealed that fuel subsidy removal has no statistically significant impact on the inflation rate. The study further found that household consumption pattern has significant on Nigeria's economic stability. The study concludes that the inflationary effect of fuel subsidy removal is not statistically significant within the period studied. It recommends that government pursue policies that boost household disposable income Wordcount:209 Key Words; Fuel Subsidy, inflation, OLS, Macroeconomic Stability. JEL: B22, E32. H25

Keywords

; Fuel SubsidyinflationOLSMacroeconomic Stability. JEL: B22E32. H25

References

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Fuel Subsidy Removal and Macroeconomic Stability in Nigeria

Abstract

Keywords

References

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