FUEL SUBSIDY REMOVAL AND SOCIOECONOMIC WELLBEING OF RESIDENTS IN AKWA IBOM STATE, NIGERIA
DOI:
https://doi.org/10.5281/zenodo.21817558Keywords:
Fuel subsidy removal, standard of living, household welfare, transportation costs, household consumption patterns, purchasing power, household energy costs, Akwa Ibom State, Nigeria.Abstract
This study examined the effect of fuel subsidy removal on the standard of living of residents in Akwa Ibom State, Nigeria. Specifically, it investigated the effect of increased transportation costs on household welfare, the influence of rising prices of goods and services on household consumption patterns, the effect of reduced household purchasing power on access to basic necessities, and the impact of increased household energy costs on household income and savings. A descriptive survey research design was adopted. The population comprised 848,517 registered voters aged 18 years and above in six selected urban Local Government Areas across the three senatorial districts of Akwa Ibom State, based on the Independent National Electoral Commission (INEC) 2023 Register of Voters. Using the Krejcie and Morgan sample size determination table, a sample of 384 respondents was selected through a multi-stage sampling technique involving purposive, stratified, and simple random sampling, of which 380 questionnaires were successfully retrieved and analyzed. Data were collected using a structured questionnaire and Key Informant Interviews (KIIs). The instrument was validated by experts in Measurement and Evaluation and Public Administration, while reliability was established using the Cronbach Alpha technique, which produced an acceptable reliability coefficient. Data were analyzed using descriptive statistics (frequency counts and percentages), while the hypotheses were tested using the Pearson Product Moment Correlation (PPMC) at the 0.05 level of significance. The findings revealed that increased transportation costs significantly affected household welfare (r = 0.059 > 0.101.); rising prices of goods and services significantly altered household consumption patterns (r = 0.254 > 0.101); reduced household purchasing power significantly constrained access to basic necessities and increased household energy costs significantly reduced household income and savings. The study concluded that fuel subsidy removal has significantly lowered the standard of living of residents in Akwa Ibom State by increasing the cost of living, weakening household purchasing power, and heightening financial vulnerability. The study recommended the implementation of targeted social protection programmes, transportation support schemes, effective price stabilization measures, expanded employment opportunities, improved electricity infrastructure, and increased investment in renewable energy to mitigate the adverse welfare effects of fuel subsidy removal.
References
Abdullahi, M., & Musa, A. (2024). Fuel subsidy removal and household welfare in Nigeria: Assessing the socioeconomic consequences of petroleum price deregulation. Journal of African Development Studies, 15(2), 45–62.
Adebayo, A. (2024). Fuel subsidy removal and household welfare in Nigeria: Implications for inflation, consumption and poverty. Journal of Economic Policy and Development Studies, 10(2), 45–62.
Adebayo, A., & Ojo, T. (2024). Fuel subsidy reform, inflation and household consumption adjustment in Nigeria. African Journal of Economic Policy, 11(1), 34–50.
Adeniran, A., Ishaku, J., & Yusuf, S. (2023). Fuel subsidy removal and social protection in Nigeria: Policy options for inclusive growth. African Economic Research Consortium Working Paper.
Adepoju, O. O., Balogun, A., & Ogola, D. (2023). Impact of fuel subsidy removal on gross domestic product and transportation cost in Nigeria. European Journal of Theoretical and Applied Sciences, 1(5), 769–777.
Afrobarometer. (2024). Nigerians’ views on fuel subsidy removal and economic hardship. Afrobarometer Dispatch.
Afrobarometer. (2025). Nigerians’ experiences and perceptions of fuel subsidy removal and economic hardship. Afrobarometer Dispatch.
Aigbokhan, B. E. (2019). Petroleum subsidy reforms and poverty reduction in Nigeria: A policy assessment. Journal of Economic and Social Studies, 9(1), 23–40.
Ajakaiye, O., & Adeyeye, A. (2023). Fuel subsidy reform, inflation and household welfare in Nigeria. Nigerian Journal of Economic and Social Studies, 65(1), 1–20.
Akinyemi, O., & Oladipo, O. (2023). Fuel subsidy removal and inflationary pressures in Nigeria: Implications for household consumption. African Journal of Economic Review, 11(4), 78–95.
Akpan, E. A., & Bassey, I. U. (2024). Fuel subsidy removal and household welfare in Nigeria: Evidence from rising inflation and declining purchasing power. Journal of African Economic and Social Development, 12(2), 55–72.
Barr, N. (2020). The economics of the welfare state (6th ed.). Oxford University Press.
Becker, G. S. (1965). A theory of the allocation of time. The Economic Journal, 75(299), 493–517.
Boardman, A. E., Greenberg, D. H., Vining, A. R., & Weimer, D. L. (2018). Cost-benefit analysis: Concepts and practice (5th ed.). Cambridge University Press.
Bouzarovski, S., & Petrova, S. (2015). A global perspective on domestic energy deprivation: Overcoming the energy poverty–fuel poverty binary. Energy Research & Social Science, 10, 31–40.
Central Bank of Nigeria. (2023). Economic report: Recent economic developments in Nigeria. Abuja: Central Bank of Nigeria.
Central Bank of Nigeria. (2024). Economic report: Recent economic developments in Nigeria. Abuja: Central Bank of Nigeria.
Chiedu, E. (2024). Fuel subsidy removal and economic adjustment in Nigeria: Implications for households and businesses. Nigerian Institute of Social and Economic Research.
Chukwuma, A., & Bello, M. (2021). Fuel subsidy administration and corruption challenges in Nigeria’s petroleum sector. International Journal of Public Administration and Management Research, 7(2), 45–60.
Deaton, A., & Muellbauer, J. (1980). Economics and consumer behavior. Cambridge University Press.
Essien, A. E., & Bassey, E. O. (2024). Fuel subsidy removal and household livelihood challenges in Nigeria. Nigerian Journal of Social and Economic Studies, 15(1), 77–94.
Essien, A. E., & Udo, I. E. (2024). Economic reforms, inflation and household welfare in Nigeria: Implications of petroleum subsidy removal. Journal of Public Policy and Development Studies, 9(2), 101–118.
Financial Times. (2024). Nigeria’s fuel subsidy reforms trigger inflation and cost-of-living pressures. Financial Times.
Friedman, M. (1957). A theory of the consumption function. Princeton University Press.
Hicks, J. R. (1939). The foundations of welfare economics. The Economic Journal, 49(196), 696–712.
Ighomereho, O. S., & Ezeabasili, A. C. (2024). Stakeholder engagement and public acceptance of fuel subsidy reform in Nigeria. Journal of Public Administration and Policy Research, 16(1), 15–28.
Ighomereho, S. O., & Ezeabasili, I. E. (2024). The role of marketing in public policy decision making: The case of fuel subsidy removal in Nigeria. arXiv.
Ijisrt. (n.d.). Fuel subsidy removal and food security challenges in Nigeria. International Journal of Innovative Science and Research Technology.
International Energy Agency. (2023). Fossil fuel consumption subsidies 2023. International Energy Agency.
International Monetary Fund. (2023). Nigeria: 2023 Article IV consultation—Press release; staff report; and statement by the Executive Director for Nigeria. IMF.
John, A., & Ishola, R. (2026). Fuel subsidy removal, inflation and exchange rate volatility in Nigeria: Short-term welfare implications. African Journal of Economic Review, 14(1), 88–104.
Just, R. E., Hueth, D. L., & Schmitz, A. (2004). The welfare economics of public policy: A practical approach to project and policy evaluation. Edward Elgar Publishing.
Kaldor, N. (1939). Welfare propositions of economics and interpersonal comparisons of utility. The Economic Journal, 49(195), 549–552.
KPMG Nigeria. (2023). Fuel subsidy removal in Nigeria: Economic implications and policy considerations. KPMG Nigeria.
Kreston Pedabo. (2024). Nigeria fuel subsidy removal: Economic impact and policy considerations. Kreston Pedabo.
Mankiw, N. G. (2021). Principles of economics (9th ed.). Cengage Learning.
Meludu, N. T., Nwajiuba, C., & Eze, S. (2023). Fuel price increases and food security challenges among Nigerian households. Journal of Agricultural Extension and Rural Development, 15(2), 25–38.
Modigliani, F., & Brumberg, R. (1954). Utility analysis and the consumption function: An interpretation of cross-section data. In K. K. Kurihara (Ed.), Post-Keynesian economics (pp. 388–436). Rutgers University Press.
Musa, A., & Abubakar, M. (2022). Energy poverty and household welfare in Nigeria: Evidence from low-income communities. Energy Research & Social Science, 89, 102542.
National Bureau of Statistics. (2023). Nigeria multidimensional poverty index survey report. Abuja: National Bureau of Statistics.
Nigerian Economic Summit Group. (2023). Fuel subsidy removal and Nigeria’s economic transformation agenda. NESG Policy Brief.
Nigerian Economic Summit Group. (2024). Fuel subsidy removal and Nigeria’s economic transition: Policy options for inclusive growth. NESG Policy Brief.
Njoku, C. N., & Mmougbuo, C. O. (2025). Fuel subsidy removal and household welfare among low-income families in Nigeria. International Journal of Social and Economic Research, 12(1), 55–72.
Nwafor, C. E., & Okoye, P. V. (2023). Fuel subsidy removal and poverty vulnerability among Nigerian households. International Journal of Development and Economic Sustainability, 11(3), 1–18.
Nwosu, C., & Asogwa, F. (2024). Petroleum subsidy reform and household welfare outcomes in Nigeria. International Journal of Development Economics, 8(3), 66–84.
Ojo, O., & Adeyemi, T. (2024). Inflation, income adjustment and household consumption behaviour after fuel subsidy removal in Nigeria. Journal of African Economic Studies, 8(3), 101–119.
Okon, E. E., & Etim, J. E. (2024). Fuel price deregulation and socioeconomic wellbeing of Nigerian households. Journal of Development and Public Administration, 10(1), 20–38.
Okonjo-Iweala, N., & Osafo-Kwaako, P. (2020). Nigeria’s economic reforms: Lessons from subsidy management and public finance reforms. Journal of African Economic Policy Studies, 8(1), 1–20.
Okorie, C., & Wesseh, P. K. (2024). Fuel subsidy reform and household welfare in Nigeria: The role of social protection measures. Economic Change and Restructuring, 57, 1–20.
Okorie, C., Wesseh, P. K., & Mensah, E. (2024). Fiscal reforms, subsidy savings and economic performance in Nigeria. Journal of Policy Modeling, 46(2), 310–327.
Okpok, A., & Etuk, E. (2025). Fuel subsidy removal and food security among rural households in Nigeria. Nigerian Journal of Agricultural Economics, 15(1), 77–95.
Olaniyi, E., Oladipo, O., & Adeoye, B. (2023). Fuel subsidy removal and socioeconomic welfare in Nigeria: Evidence from household responses. African Journal of Economic Review, 11(3), 89–105.
Organisation for Economic Co-operation and Development. (2023). OECD economic surveys: Nigeria. OECD Publishing.
Overseas Development Institute. (2024). Nigeria’s fuel subsidy reform: Fiscal savings, welfare implications and social protection challenges. Overseas Development Institute.
Ozili, P. K., & Obiora, K. (2023). Implications of fuel subsidy removal on the Nigerian economy. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4535876.
Pachauri, S., & Spreng, D. (2011). Measuring and monitoring energy poverty. Energy Policy, 39(12), 7497–7504.
Petroleum Products Pricing Regulatory Agency. (2013). Petroleum subsidy: The facts. Abuja: PPPRA.
Pigou, A. C. (1920). The economics of welfare. Macmillan.
PricewaterhouseCoopers. (2013). Fuel subsidy reform in Nigeria: A review of the subsidy regime and its implications. PwC Nigeria.
Reuters. (2024). Nigeria fuel subsidy removal increases inflation and living costs despite fiscal gains. Reuters.
Sambo, A. S., Garba, B., Zarma, I. H., & Gaji, M. M. (2012). Electricity generation and the present challenges in the Nigerian power sector. Energy Policy, 37(7), 379–386.
Sambo, A., & Lumami, Y. (2024). Fuel subsidy removal and household welfare in Northern Nigeria: Evidence from economic adjustment experiences. Journal of Economic and Social Studies, 14(2), 112–130.
Sovacool, B. K. (2012). The political economy of energy poverty: A review of key challenges. Energy for Sustainable Development, 16(3), 272–282.
Stiglitz, J. E. (2000). Economics of the public sector (3rd ed.). W. W. Norton.
The Tide. (2025). Fuel subsidy removal and poverty challenges in Nigeria. The Tide Newspaper.
Todaro, M. P., & Smith, S. C. (2021). Economic development (13th ed.). Pearson.
Udo, E., & James, A. (2023). Petroleum downstream deregulation and economic reform in Nigeria. Journal of Public Policy and Administration Research, 13(4), 20–35.
Udoh, E. J., Ibanga, I. E., & Atairet, J. (2025). Fuel subsidy removal and household livelihood vulnerability in Akwa Ibom State, Nigeria. Nigerian Journal of Social Sciences, 21(1), 45–63.
Udoh, E. J., Iyoho, A. E., & Akpabio, E. M. (2023). Fuel subsidy removal and livelihood vulnerability among oil-producing communities in Akwa Ibom State, Nigeria. Nigerian Journal of Social Sciences, 19(2), 55–72.
United Nations Development Programme. (2024). Nigeria human development report: Addressing poverty and inequality in times of economic transition. UNDP.
World Bank Energy Subsidy Reform Facility. (2020). Social protection and subsidy reform: Lessons from global experiences. World Bank.
World Bank. (2022). Nigeria development update: The future of Nigeria’s economy. World Bank.
World Bank. (2023). Nigeria Development Update: Seizing the opportunity. Washington, DC: World Bank.
World Bank. (2023). Nigeria development update: Turning the corner: From reforms to growth. World Bank.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Umoren Nsima Udo, Professor Chijioke Basil Onuoha, Ebong Itoro Bassey PhD (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright. Licensed under the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. https://creativecommons.org/licenses/by/4.0/ (CC BY 4.0 deed)
