Nigeria’s fossil fuel subsidy reforms: the welfare effects on households

The removal of fossil fuel subsidies is critical to limit temperature increases and lower carbon emissions. But doing so can have profound social and economic implications. When Nigerian president Bola Tinubu ended the country’s petrol subsidy in May 2023, citizens faced soaring petrol prices, sparking concerns around the socio-economic impact of subsidy reform for vulnerable households. While the removal of fossil fuel subsidies paved the way for sustainable growth and the fulfilment of climate change commitments in Nigeria, it also created challenges for the nation’s socio-economic landscape. Understanding the distributional consequences of fossil fuel subsidies is therefore critical for sustainable and inclusive energy transitions. →