Political Economy of Fuel Subsidy Reform on Transportation Sector in Nigeria: A Critical Analysis of Governance, Corruption, and Policy Implementation Challenges
Keywords:
Corruption, fuel subsidy, governance, Nigeria ,policy implementation, political economy, NigeriaAbstract
Fuel subsidy regime in Nigeria was instituted in 1973 to mitigate the influence of high petroleum prices and arouse energy output, has changed into a deeply rooted system branded by fiscal incompetence governance, incompetence, discrepancy, and endemic corruption. This research stipulate a significant analysis of the political economy dynamics underpinning fuel subsidy reform in Nigeria, with particular emphasis on governance failures, corruption networks, and policy implementation challenges that have factually undermined reform efforts. Drawing on official economics and political economy theories, the paper assess how unofficial institutional agreement surrounding fuel merchandizers, bureaucratic concierges, and political leaders have steadily subverted official rules structures, marking a series of rent-seeking and improvement turnaround. The research employed a mixed-methods approach that combines regression analysis of macroeconomic variables with qualitative case study evidence, the study revealed that governance quality, measured by institutional transparency and corruption control, significantly influences the success of subsidy reform outcomes (p<0.01). The 2023 subsidy removal, while fiscally justified, has worsened inflationary stresses and unduly, affected low-income households, transportation sector, subjecting critical gaps in social protection devices. The study concludes that sustainable reform needs not just price rectification but basic official restructuring to close fiscal leakages, enhance revenue integrity, and bring in to line governance frameworks with socio-economic realisms. Recommendations include targeted social safety nets, investment in domestic refining capacity, and comprehensive anti-corruption reforms to rebuild public trust and ensure equitable policy outcomes.
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