GASPRO International Journal of Eminent Scholars

This study aims to examine the challenges associated with fuel subsidies and the curative strategies for the Nigerian government. The fuel subsidy in Nigeria has been an important economic policy aiming at lowering the cost of petroleum goods for residents. However, the policy's long-term viability has been called into doubt due to the significant financial load it throws on the government, as well as its contribution to systemic corruption and inefficiency. Key challenges include economic burden and fiscal deficit, inequitable distribution of benefits, and corruption and mismanagement. These factors have led to several malpractices, which include corruption and fraudulent claims, fuel diversion and smuggling, political manipulation, and patronage networks. This study also explores remedial strategies for addressing these challenges, emphasizing the need for comprehensive economic reform. These include diversification of energy sources, investment in public transport, and refining capacity expansion to mitigate the impact of subsidy removal on vulnerable populations. The study concluded that by fostering an efficient public transportation system, the government can alleviate the immediate burden on citizens while ensuring sustainable economic growth. One of the recommendations provided was that strengthening local fuel production by investing in refineries and encouraging public-private partnerships will reduce Nigeria’s dependence on imported fuel and stabilize local fuel prices in the long term.

Keyword: Fuel Subsidy, Origin, Governance, Challenges, Remedial, Malpractices and Nigerian Government