In June 2023, President Bola Tinubu ended Nigeria’s decades-old fuel subsidy. Pump prices jumped overnight from about ₦185 per litre to between ₦350 and ₦550. By late 2024, petrol in major cities sold for as much as ₦1,050 per litre as the government scrapped state-controlled pricing and let market rates prevail.
The reform aimed to free billions in public funds for development. Instead, it unleashed a sharp economic shock.
Inflation Surges, Currency Weakens, Real Wages Shrink
The subsidy removal accelerated inflation. Consumer prices rose from about 23% before the reform to more than 30% by late 2024. By spring 2025, inflation eased to 23–24%, but essential goods remain far more expensive.
The naira’s slide compounded the pain. The currency fell from roughly ₦750 to the dollar in mid-2023 to over ₦1,400 in early 2025. Higher import costs pushed up prices for fuel, food, and manufactured goods.
Even with the National Assembly raising the minimum wage to ₦70,000 in 2024, inflation and currency depreciation eroded earnings. For low-income workers, urban traders, and rural farmers, wages now buy far less than two years ago.
Every day, Nigerians Bear the Brunt
Transport costs have soared. In Lagos, a trip once costing ₦200 now averages ₦500 to ₦600. Intercity fares have tripled on major routes. Many residents now walk, cycle, join carpools, or move closer to work to save money.
Some households have switched from cooking gas and kerosene to firewood or charcoal. Others have converted vehicles to compressed natural gas (CNG), cutting daily fuel expenses from ₦45,000 to about ₦5,000. Yet the ₦1–1.5 million conversion cost keeps this option out of reach for most.
In rural areas, higher costs for diesel, spare parts, and fertilizer have forced farmers to scale back planting or switch to subsistence crops, raising new concerns over food security.
Government Relief Falls Short
To cushion the blow, the federal government rolled out several palliatives. States received ₦5 billion for food and fertilizer. A ₦500 billion stimulus targeted agriculture, MSMEs, transport, and jobs. The administration also tapped an $800 million World Bank loan to expand cash transfers, claiming it would reach millions of households.
Critics say the programs are uneven and poorly targeted. Watchdog groups report that many vulnerable households never receive aid, while politically connected individuals often benefit instead.
Protest, Strikes, and Public Anger
Protests erupted soon after the subsidy ended. In August 2024, #EndBadGovernance demonstrations spread nationwide. Amnesty International confirmed that security forces killed at least 24 people; none have seen justice.
Teachers, doctors, and transport workers have staged strikes or threatened action, demanding more relief and slower policy implementation. Even when petrol prices dipped briefly, transport fares stayed high, passing the burden back to commuters.
Industry and Labour Remain Divided
Private refiners and marketers support the subsidy’s removal, calling it fiscally prudent and essential to end leakages. They argue that more domestic refining will eventually ease prices.
Labour unions and civil society groups remain cautious. They warn that unless savings are transparently reinvested in infrastructure and social services, the policy will deepen poverty and unrest.
Lessons Nigeria Can Learn
Other nations offer cautionary examples. Ghana and Indonesia phased out subsidies gradually, paired with strong safety nets. Indonesia’s “BLT” program delivered targeted cash transfers, while Ghana expanded social protections alongside reforms.
Nigeria’s approach lacked equally robust safeguards or sustained public engagement. Analysts warn that without stronger safety nets and visible investments in transport, education, and health, the gains could be short-lived.
The High Price of Change
Two years on, Nigeria has removed fuel subsidies, a fiscal milestone decades in the making. But the social cost is high. Inflation remains elevated, real incomes are weak, and poverty is worsening.
The policy’s success now depends on whether the government channels savings into projects that improve lives. Without this, the reform’s legacy may be defined not by stability and growth, but by hardship and public distrust.