The removal of fuel subsidy in Nigeria has significantly increased the cost of living while improving government revenue, according to a data-driven analysis on the impact of the policy.
The report reveals that after the Federal Government ended the fuel subsidy in May 2023, the pump price of petrol rose from about ₦185–₦206 per litre to over ₦1,000 per litre in many parts of the country. The sharp increase triggered higher transportation fares, food prices, and inflation, placing additional financial pressure on households.
Data also indicates that daily petrol consumption dropped significantly after the subsidy was removed as many Nigerians reduced fuel usage due to rising costs.
Despite the hardship, the report notes that the government has recorded substantial savings from the removal of subsidy. These savings have reportedly strengthened public finances, increased revenue allocations to states, reduced fiscal deficits, and created opportunities for greater investment in infrastructure and social programmes.
The analysis further shows that while fuel subsidy previously kept petrol prices low, it consumed trillions of naira annually and disproportionately benefited wealthier Nigerians who used more fuel.
The report concludes that although the policy has caused short-term economic hardship, data journalism provides evidence that it has also improved fiscal sustainability. It recommends continued monitoring of government spending to ensure savings from subsidy removal are invested in projects that directly benefit Nigerians.
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