Formulating a Deterministic Model for Suppressing the 
Effects of Fuel-Subsidy Removal on the Nigerian 
Economy

Ayotokun Kolade Emmanuel; Adeosun Mabel Eruore; Bakare Olasubomi Abdulateef

doi:https://doi.org/10.14445/22315373/IJMTT-V71I7P102

International Journal of Mathematics Trends and Technology

Research Article | Open Access | Download PDF

Volume 71 | Issue 7 | Year 2025 | Article Id. IJMTT-V71I7P102 | DOI : https://doi.org/10.14445/22315373/IJMTT-V71I7P102

Formulating a Deterministic Model for Suppressing the Effects of Fuel-Subsidy Removal on the Nigerian Economy

Ayotokun Kolade Emmanuel, Adeosun Mabel Eruore, Bakare Olasubomi Abdulateef

Received	Revised	Accepted	Published
19 May 2025	26 Jun 2025	11 Jul 2025	27 Jul 2025

Citation :

Ayotokun Kolade Emmanuel, Adeosun Mabel Eruore, Bakare Olasubomi Abdulateef, "Formulating a Deterministic Model for Suppressing the Effects of Fuel-Subsidy Removal on the Nigerian Economy," International Journal of Mathematics Trends and Technology (IJMTT), vol. 71, no. 7, pp. 11-27, 2025. Crossref, https://doi.org/10.14445/22315373/IJMTT-V71I7P102

Abstract

This study develops a deterministic SEIR model to evaluate and mitigate the impact of fuel subsidy removal on the Nigerian economy. It derives a system of nine non-linear differential equations driven by assumed interactions among economic sectors. The model analyzes fuel subsidy removal, free and prevalent steady states and obtains the economic distress reproduction number, which was found to be greater than one, indicating ongoing economic distress. The sensitivity indices show that the rates at which major sectors are affected due to the increase in fuel price need to be reduced to the greatest extent. Descriptive data of the fuel prices for a four-year period covering the pre- and post-fuel subsidy removal show higher mean, range, and variance in the post-fuel subsidy removal era. Numerical simulations reveal a sharp rise in distress across sectors, followed by a slow and non-uniform recovery rate. The sector comprising individual households that consume foodstuffs experiences greater disruption than the commuters and utilizers of manufactured goods. Also, the recovery path remains unstable, pointing to long-term structural effects. The sensitivity analysis result suggests that adjusting certain parameters can minimize the economic distress number. The study concludes that fuel subsidy removal causes immediate, widespread disruption across Nigeria’s economy, with non-uniform recovery rates. It stresses the urgent need for targeted interventions to support the most vulnerable sectors.

Keywords

Deterministic models, Economic sectors, Financial contagion, Fuel subsidy, SEIR FS removal modeling.

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