Fuel Subsidy Removal in Nigeria: Real Effects on Households in 2025
Since President Bola Ahmed Tinubu’s announcement of fuel subsidy removal in May 2023, Nigerians have experienced one of the most significant economic shocks in recent history. Two years later, in 2025, the ripple effects are still being felt in almost every household across the country.
Economic Hardship Deepens
Fuel prices skyrocketed from around ₦185 per litre to over ₦600 in many areas. This price surge has led to an unprecedented increase in transportation costs, food prices, electricity bills (for those using petrol generators), and general cost of living. Many Nigerians now spend more than half their income on transportation alone.
According to a National Bureau of Statistics (NBS) survey conducted in early 2025, over 72% of Nigerian households report cutting back on food, healthcare, and education expenses due to rising fuel-related costs.
Middle-Class Squeeze and Increased Poverty
The middle class, once a buffer in the Nigerian economy, has been squeezed tighter than ever. Private car owners are parking their vehicles due to the high cost of petrol, while public transport users face exorbitant fare hikes. A trip that once cost ₦300 now costs ₦1,200 or more in cities like Lagos, Abuja, and Port Harcourt.
A recent World Bank report indicates that an estimated 4 million Nigerians have slipped into poverty since the subsidy removal took full effect.
Small Businesses on the Brink
Small and medium enterprises (SMEs), particularly those that rely on petrol-powered generators due to unreliable power supply, have been hit hard. Tailors, barbers, frozen food sellers, and cyber café owners are struggling to stay afloat. Many have shut down completely.
Mr. Tunde, a barber in Ilorin, told Republican Nigeria:
“I now open only three days a week. Fuel is just too expensive. If the price goes any higher, I’ll have to close shop permanently.”
Inflation and Food Security
Fuel subsidy removal has had a domino effect on inflation. Nigeria’s inflation rate in Q1 2025 stands at 31.8%, the highest in over a decade. Food inflation is even worse at 39.5%, according to the Central Bank of Nigeria (CBN).
Farmers are struggling to transport goods from rural to urban areas, leading to post-harvest losses and higher market prices. Perishable goods like tomatoes and fruits now cost triple what they did two years ago.
Government’s Justification and Palliative Measures
The Federal Government maintains that fuel subsidy removal was necessary to prevent economic collapse and reduce corruption in the oil sector. In return, they’ve promised to redirect saved funds to infrastructure, healthcare, and education.
So far, the ₦8,000 monthly conditional cash transfer introduced in 2023 has expanded to about 5 million households. However, critics say it is grossly insufficient to counterbalance the level of hardship.
In December 2024, the government launched a Compressed Natural Gas (CNG) transition program, aimed at converting commercial buses to CNG to reduce operating costs. But implementation has been slow, with only 2,500 buses converted nationwide by July 2025.
Public Sentiment and Protests
Many Nigerians feel abandoned. Protests and labor strikes have been widespread. In March 2025, the Nigeria Labour Congress (NLC) staged a two-day nationwide strike, demanding wage increases and reversal of the subsidy removal.
A Lagos commuter, Ifeoma, said:
“We were promised that things would get better. It’s been two years, and things keep getting worse.”
Social media continues to be a battleground of debate, with hashtags like #BringBackSubsidy and #TinubuFailed trending periodically.
What Lies Ahead?
Experts say the road to economic recovery will be long and painful. Without a significant increase in local refining capacity and a reduction in reliance on fuel imports, Nigeria may remain vulnerable to global oil price volatility.
Meanwhile, citizens are adjusting in real-time — some walking to work, others migrating to rural areas, and many relying heavily on family support.
Conclusion
The removal of fuel subsidy in Nigeria was intended to save the country billions of naira, but in 2025, the average Nigerian is paying a steep price. The true measure of its success will depend on how well the government cushions the blow and builds a resilient, inclusive economy for all Nigerians.
