The Impact of Fuel Subsidies in Nigeria

The Nigerian government has long subsidized fuel prices, making gasoline among the cheapest in the world for its citizens. This strategy, initiated in the 1970s, was designed to compensate for the government's failure to provide basic infrastructure and services, such as education and stable electricity. However, this system has become increasingly unsustainable, costing the country around $10 billion in 2022 alone. There is a growing consensus that removing these subsidies is essential for the economy, especially as Aliko Dangote's new refinery aims to enhance domestic refining capabilities and ultimately end these subsidies.