The Impact of Gasoline Subsidy Removal on the Transportation Sector in Nigeria

Nigeria, like other oil exporting countries in the world has embarked on the policy of gradual removal of fuel subsidies since 1970s. However, this issue has become highly contentious in recent time due to the incessant nature and the effects on the economy. To this end the paper examine the impact of subsidy removal on transport sector development in Nigeria using the co-integration and error-correction models. The result showed that subsidy had a positive and significant relationship with transport sector which implies that removing gasoline subsidies can increase the operational cost of transportation sector and reduce the gross domestic product (GDP) of the country