Vol. 10, Issue 5, Part D (2024)

The study investigated the effects of the fuel subsidy removal on the economic welfare of Nigerians within the period 1990 to 2022. Using a price pass-through model, the study employed the use of unit root test, cointegration, Pairwise Granger Causality Tests, and VECM. The study examines both the short and long run effect of fuel subsidy removal on the economic welfare of Nigerian. The test for trend variability (unit root) to determine the stability of data was done using the Augmented Dickey Fuller and Phillip-Perron test. The result revealed that the Price of Petroleum Motor Spirit, Inflation rate, Unemployment, Population increase will lead to decline on economic welfare of most Nigerians due to the negative impact of this variables on economic welfare. While Per Capita Income will improve the economic welfare in Nigeria. The study recommend the followings: fuel subsidy removal should not be a prompt decision without addressing the issue of mass unemployment in Nigeria; The government should set aside funds to take care of the welfare of the masses for fuel subsidy removal to thrive, as is obtainable in other countries of the world; The government should tackle the issue of sore inflation in Nigeria. The government should promote the adoption of renewable energy sources such as solar, wind, and hydropower