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The adoption of biofuels holds a diversity of opportunities and potentials for the Nigerian economy. Some of these opportunities are key socioeconomic drivers and incentives promoting the increasing adoption of biofuels. From the upstream to the downstream sub-sectors, there is an increasing entry of players and participants (private and public investors). This paper explores the underlining socioeconomic drivers and incentives promoting and encouraging more investments in the biofuels subsectors of the Nigerian economy. The research sourced data from basically secondary sources and through desk-reviews. The papers identifies essential socioeconomic indices which include the default dependence of biomass fuels, poverty and unemployment, declining agricultural productivity, underutilization of arable lands, potential demand for biofuels and government policy and incentives. As the global trend shows increasing adoption of biofuels, this paper reveals and discusses the socioeconomic drivers peculiar to Nigeria. These key factors identified are issues to put into consideration for sustainably managing biofuels investments in Nigeria. Some of these factors present prospects and problems requiring medium and long term policy interventions from government to ensure an efficient transition into a bioenergy driven economy. The socioeconomic factors identified also presents key variables for further socioeconomic and bio-economic modelling studies focusing on Nigeria.

a b s t r a c tThe promotion and adoption of biofuels in Nigeria must be predicated on sufficient capacity for absorbing biofuels produced from the increasing investments in biofuels plantations, plants and processing facilities. This paper assesses the socioeconomic and related premises for biofuels development in Nigeria by conducting an econometric estimation of the petroleum products consumption. The paper first estimates aggregated petroleum product consumption, and then assess the response to specific petroleum products in terms of consumption, market (population), electricity generation, installed electricity generation capacity, and GDP. The result shows that all the petroleum products contribute significantly and about equally to aggregate petroleum consumption. The high proportion of petrol (about 44 percent) as a percentage of the aggregate petroleum product consumption validates the push for implementing the E10 petrol-ethanol blending for Nigeria. The consumption of diesel is also significant. Diesel is another petroleum product for which D20 biofuel blending policy has been proposed. The increase in population and GDP, coupled with the poor electricity situation, will keep driving the consumption of petroleum products. As the population increases, and the country continues to struggle to match electricity generation with population growth, the petrol-ethanol and diesel-biodiesel blending policy must be pursued tenaciously to ensure a reduction in carbon emission in Nigeria.