Energy Policy Volume 156

Fuel subsidies in Nigeria are enormous – around USD 3.9 billion – almost double the health budget. Such subsidies come at great cost: the opportunity costs of such spending on other development objectives are large; the distribution of resources to the state governments is reduced; the vast majority of the subsidy goes to better off Nigerians; and cheaper petrol encourages greater pollution, congestion and climate change.

Despite this, most Nigerians oppose the reduction of subsidies.

We draw on a new nationally representative household survey that asked Nigerian men and women about their knowledge and attitudes towards subsidies. We construct and test a set of hypotheses about the factors associated with support for subsidy reform. We find that those who pay more or who experience less availability of fuel tend to support reform more. On the other hand, people who believe the Government is corrupt or lacks the capacity to implement compensation programs appear strongly opposed to reform.

Finally, being religious and the delivery of reasonable national and local services also improves the acceptance of reform. These results support the idea that building a social contract is key to reform success.

Find the survey, questionnaire, and full dataset here.


Neil McCulloch

Dr. Neil McCulloch is a development economist with expertise in political economy analysis and the design and implementation of politically smart aid programmes. He has led the Globalisation Research Team in the Institute of Development Studies in the UK and was a Senior Economist for the World Bank in Indonesia.

Tom Moerenhout

Dr. Tom Moerenhout (Columbia University) leads research on the political economy and international economic law of policy interventions in the area of sustainable development. He is also senior associate at the Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD).

Joonseok Yang

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