FUEL SUBSIDY REMOVAL AND THE ECONOMY OF SOUTH LOCAL GOVERNMENT IN NIGERIA

Abstract

This study examined the relationship between fuel subsidy removal and the economy of Nigeria with a special reference to IKA South Local Government Area. The study adopted survey research design and was anchored on Neo-liberalism theory as its theoretical framework. Data were sourced from 390 respondents through a self-administered questionnaire, and the sample size was determined using the Taro Yamane method. Data collected was analyzed using percentages and frequency and Pearson’s correlation coefficient with the aid of Statistical Package of Social Science (SPSS) version 23.0. Findings revealed that, fuel subsidy removal has a significant relationship with increase in the price of food stuffs, also, fuel subsidy removal has a significant relationship with the rate of poverty and fuel subsidy removal has a significant relationship with the rate of unemployment in IKA South Local Government Area. The study concluded that the President Bola Tinubu’s administration removed fuel subsidy in Nigeria when refineries are nonfunctional thereby necessitating the continuous importation of refined petroleum. Fuel importation strains the local currency while the subsidy primarily favored the cabals and a leeway for arbitrage and the illicit transportation of petrol to neighboring countries and therefore recommended among others that the government should provide palliatives to Nigerians to mitigate the effects of the fuel subsidy removal. Also, the government should make sure that the new minimum wage is enforced in all sectors, including the private sector. If this is done, it will moderate the impacts of the fuel subsidy removal on the general populace.