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The Economic Impact of Fuel Subsidy Removal on Inflation, Household Welfare, and Fiscal Sustainability in Nigeria
Subject area: Management and Commerce · Area of research: Fiscal Policy and Economic Development
DOI: https://doi.org/10.64388/IREV10I3-1722812
Abstract
This study examined the economic impact of fuel subsidy removal on inflation, household welfare, and fiscal sustainability in Nigeria with particular reference to Nnamdi Azikiwe University, Awka, Anambra State. The study population comprised 750 academic staff and final-year students across selected faculties of the university. A sample of 150 representing 20% of the population was taken. The study adopted a descriptive survey design, while the instrument for data collection was a structured questionnaire. The Likert four-point scale rating was adopted whereas the data collected were analysed using the mean. The results of the data analysis showed that fuel subsidy removal highly influences inflation and household welfare in Nigeria. Rising transport and food costs, reduced purchasing power, and inadequate palliative measures were identified as major channels of impact. The researchers recommend that the government should implement targeted social protection programmes, invest subsidy savings in public transportation and domestic refining, ensure transparent utilisation of fiscal gains, and provide adequate palliatives to cushion the adverse effects on households as measures to maximise the benefits of the reform while minimising its social costs.
Keywords
fuel subsidy removal, inflation, household welfare, fiscal sustainability, questionnaire, cost-push inflation, nigeria
How to cite this paper
@article{1722812,
author = {Ukachukwu Chikodi Cynthia, Tyonongu Samuel, Miracle Ebere Ejiako, Chinaza Naomi Popoola; Kelechukwu Chisom Okoli, Faith Tangsi Christopher; Emmanuel Chinaza Ifedi},
title = {The Economic Impact of Fuel Subsidy Removal on Inflation, Household Welfare, and Fiscal Sustainability in Nigeria},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {10},
number = {3},
pages = {601-608},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1722812.pdf},
abstract = {This study examined the economic impact of fuel subsidy removal on inflation, household welfare, and fiscal sustainability in Nigeria with particular reference to Nnamdi Azikiwe University, Awka, Anambra State. The study population comprised 750 academic staff and final-year students across selected faculties of the university. A sample of 150 representing 20% of the population was taken. The study adopted a descriptive survey design, while the instrument for data collection was a structured questionnaire. The Likert four-point scale rating was adopted whereas the data collected were analysed using the mean. The results of the data analysis showed that fuel subsidy removal highly influences inflation and household welfare in Nigeria. Rising transport and food costs, reduced purchasing power, and inadequate palliative measures were identified as major channels of impact. The researchers recommend that the government should implement targeted social protection programmes, invest subsidy savings in public transportation and domestic refining, ensure transparent utilisation of fiscal gains, and provide adequate palliatives to cushion the adverse effects on households as measures to maximise the benefits of the reform while minimising its social costs.},
keywords = {fuel subsidy removal, inflation, household welfare, fiscal sustainability, questionnaire, cost-push inflation, nigeria},
month = {September},
doi = {https://doi.org/10.64388/IREV10I3-1722812}
}