Vol. 2, Issue 5, MSIJEBM-2025

The contentious policy of fuel subsidy removal in Nigeria represents a critical juncture in the nation’s economic development, with profound implications for household welfare and social equity. While ostensibly implemented to address fiscal imbalances and promote market efficiency, the abrupt withdrawal of fuel subsidies has triggered severe socioeconomic disruptions that demand rigorous examination. This paper systematically investigates the multidimensional impacts of subsidy removal on Nigerian households, focusing on the disconnect between macroeconomic objectives and microlevel welfare outcomes. Through a PRISMA-guided review of 28 empirical studies (2000-2024), we identify three critical problem areas: disproportionate burden on low-income households evidenced by 64-96% increases in essential commodity prices, exacerbation of regional inequalities particularly in northern states where poverty incidence rose by 15%, and systemic gaps in social protection mechanisms during policy implementation. The analysis reveals how existing assessment methodologies, while strong in macroeconomic forecasting, consistently fail to capture nuanced household coping strategies and gender-differentiated impacts. Our findings demonstrate that current policy frameworks lack adequate safeguards for vulnerable populations, with urban informal workers and smallholder farmers emerging as particularly disadvantaged groups. The study makes original contributions by synthesizing dispersed evidence into an integrated impact assessment framework and proposing targeted mitigation strategies that balance fiscal objectives with social protection imperatives. These insights carry significant implications for policymakers designing just energy transitions in developing economies.

Keywords: Fuel subsidy reform, household welfare, energy poverty, social protection, Nigeria, policy impacts.