Fuel subsidy removal in global south oil-producing economies: A review of literature

Abstract

Departing from earlier studies, we conduct a review of studies on fuel subsidy removal in Ghana and Nigeria highlighting the influence on poverty levels, environmental and welfare implications and political economy which is dearth in the current literature. Using the Arksey and O'Malley framework, we searched for peer-reviewed articles from JSTOR, Emerald Insight, Taylor and Francis, ScienceDirect, Springer, Elsevier and Sage databases. We used keywords and Boolean logic and our search covered twenty-three years (2000–2023). Twenty-seven studies that satisfied the inclusion measures were identified and further discussed. Removal of fuel subsidies has a detrimental effect on poverty level in both countries via transportation cost. Also, removal of fuel subsidies lessens the ecological impact in these emerging economies as well as negatively influences household welfare through high cost of living. Further, removal of fuel subsidies is associated with disagreements between the citizenry and the policymakers where the latter are accused of massive corruption coupled with poor revenue collection from the implementation of the policy. Our study's results add to the discourse on fuel subsidy removal in oil-producing and emerging economies and furnish a reference point for making decisions aimed at protecting the vulnerable in society.