AN EMPIRICAL ASSESSMENT OF THE SOCIO-ECONOMIC IMPACT OF FUEL SUBSIDY REMOVAL IN KEBBI STATE

Abstract

This study empirically assessed the socio-economic impact of fuel subsidy removal in Kebbi State, Nigeria. Following the Federal Government’s removal of the fuel subsidy in May 2023, concerns emerged regarding its effects on household welfare, transportation, business operations, and agricultural activities. The main objective was to assess the socio-economic impact of fuel subsidy removal in Kebbi State, with specific focus on its effect on household cost of living. The study adopted a descriptive survey design. Data were collected from 400 respondents across the Central Senatorial District using a structured questionnaire. Respondents comprised household heads, traders, commercial drivers, and small-scale farmers selected through multi-stage sampling. A four-point Likert scale was used to measure respondents’ perceptions. The reliability of the instrument was established through a pilot test, yielding a Cronbach’s alpha coefficient of 0.72 indicating acceptable internal consistency. Data were analyzed using frequency, percentage, mean, and standard deviation, with a criterion mean of 2.50. Findings revealed that fuel subsidy removal increased food prices, transportation fares, and the cost of agricultural inputs, thereby placing additional financial pressure on households. It also reduced household disposable income and business profitability and negatively affected daily meals, farming activities, and social cohesion. Although respondents acknowledged potential long-term benefits, particularly increased government revenue, the immediate socio-economic effects were largely negative. The study concludes that subsidy removal has imposed considerable short-term hardship. It recommends targeted and transparent palliative measures, including subsidized transportation, agricultural support, and social protection programmes to improve household welfare.