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October 9, 2025 • 6:00 pm - 8:30 pm edt

Exploring Energy Careers: Insights and Connections

The Center on Global Energy Policy at Columbia University SIPA's Women in Energy initiative, in collaboration with the Columbia Policy Institute, invites you to join us for Exploring...

Event • International Affairs Building,
Columbia SIPA
Exploring Energy Careers: Insights and Connections
Energy for Development

Fuel subsidy reform and the social contract in Nigeria: A micro-economic analysis

External Publications with Tom Moerenhout • July 19, 2021

Read the Article Abstract Fuel subsidies in Nigeria are enormous – around USD 3.9 billion...

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Abstract

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.

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Energy for Development

Fuel subsidy reform and the social contract in Nigeria: A micro-economic analysis

External Publications with Tom Moerenhout • July 19, 2021

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