FUEL SUBSIDY REMOVAL AND ITS SOCIOECONOMIC IMPLICATIONS ON HOUSEHOLD WELFARE IN TUNGA, NIGER STATE

Abstract

This study investigates the socioeconomic effects of the removal of fuel subsidies on household welfare in Tunga, Niger State. Historically, fuel subsidies in Nigeria have been employed to diminish transportation and commodities expenses, ultimately enhancing household welfare. In 2023, the federal government rescinded subsidies to alleviate fiscal pressure and reallocate resources towards social services and infrastructure. Data were obtained from 400 households using a survey methodology, with 300 valid responses analysed by descriptive statistics and ANOVA. The study evaluated household views on fluctuations in fuel prices, spending behaviours, and access to necessary commodities subsequent to the removal of subsidies. Findings demonstrate that most households encountered substantial rises in fuel and transportation expenses, heightened food prices, and a decline in disposable income. ANOVA results indicate a statistically significant association between subsidy removal and household welfare (F = 4.56, p = 0.003), affirming that increasing gasoline prices substantially impact living standards, particularly for low- and middle-income households. The results correspond with the cost-push theory, emphasising that rises in production and distribution expenses directly diminish household purchasing power and welfare. The research additionally concludes that governmental measures were regarded as insufficient in alleviating these impacts. The report advocates for targeted social safety nets, assistance for informal sector workers, price monitoring, public awareness initiatives, gradual policy implementation, investment in alternative infrastructure, and ongoing review to safeguard vulnerable households. The research presents empirical information about the household-level effects of subsidy removal and offers insights for policymakers aiming to reconcile fiscal sustainability with the socioeconomic welfare of communities in fuel-dependent economies.