THE EFFECT OF FUEL SUBSIDY REMOVAL ON THE LIVES OF ORDINARY NIGERIANS

 

Nigeria is a country blessed with many natural resources, especially crude oil. For many years,

people believed that because Nigeria produces crude oil, fuel should be affordable for everyone.

This was one of the reasons the government introduced fuel subsidy. Fuel subsidy was meant to

reduce the amount Nigerians paid for petrol. It helped many families because transportation,

food, and the prices of goods were not as expensive as they are today.

However, in 2023, the Federal Government announced the removal of fuel subsidy. Almost

immediately, the price of petrol increased across the country. This decision affected both rich

and poor people, but ordinary Nigerians felt the impact the most. Many people found it difficult

to meet their daily needs because almost everything became more expensive. Since then, fuel

subsidy removal has remained one of the biggest issues being discussed in Nigeria.

This article explains what fuel subsidy means, why it was removed, how it has affected ordinary

Nigerians, and what can be done to reduce the hardship many people are facing today.

What is Fuel Subsidy?

Fuel subsidy is the money the government pays to make petrol cheaper for citizens. Instead of

allowing Nigerians to pay the full market price for petrol, the government pays part of the cost so

that people can buy fuel at a lower price.

For example, if one litre of petrol actually costs ₦1,000 to sell, the government may pay part of

the cost so that Nigerians buy it for a lower amount. This is simply what fuel subsidy means.

The main purpose of fuel subsidy was to reduce the cost of living and make life easier for

Nigerians. Since fuel is used for transportation, electricity generators, farming, and many

businesses, keeping its price low also helped reduce the prices of many other goods and services.

A Brief History of Fuel Subsidy in Nigeria

Fuel subsidy has existed in Nigeria for many years. Successive governments believed that

Nigerians should enjoy cheaper fuel because the country is one of the largest producers of crude

oil in Africa.

Over time, however, many people began to complain about the subsidy system. Some experts

argued that the government was spending too much money on fuel subsidy every year. There

were also allegations of corruption, where some marketers and companies claimed subsidy

payments for fuel that was never supplied.

As the years went by, the amount spent on fuel subsidy continued to increase. The government

believed that the money being spent could instead be used to improve roads, hospitals, schools,

electricity, and other important sectors of the economy.

Because of these reasons, the Federal Government eventually announced the removal of fuel

subsidy.

Why Was Fuel Subsidy Removed?

The government gave several reasons for removing fuel subsidy.

One reason was that subsidy had become too expensive to maintain. Every year, the government

spent trillions of naira on fuel subsidy. According to government officials, this money could have

been invested in projects that would benefit Nigerians in the long run.Another reason was corruption. Many reports suggested that some individuals were taking

advantage of the subsidy system by making false claims and diverting public funds. This made

the government believe that continuing the subsidy would encourage more corruption.

The government also argued that subsidy encouraged fuel smuggling. Since petrol was cheaper

in Nigeria than in some neighbouring countries, some people illegally transported fuel across the

borders to sell it at higher prices. This reduced the amount of fuel available within Nigeria and

caused artificial scarcity.

Finally, the government believed that removing subsidy would encourage investment in local

refineries and improve competition in the petroleum sector. The expectation was that this would

eventually lead to a more stable fuel supply.

Although these reasons may sound reasonable, the immediate effect of the policy was a sharp

increase in the price of petrol. This increase affected transportation, food prices, businesses,

education, and almost every aspect of daily life. Many Nigerians who were already struggling

financially found life even more difficult after the removal of fuel subsidy.

The Effects of Fuel Subsidy Removal on Transportation

One of the first things Nigerians noticed after the removal of fuel subsidy was the increase in

transportation fares. Since commercial drivers now buy petrol at a much higher price, they also

charge passengers more money. This has made daily movement very difficult, especially for

students, workers, traders, and low-income earners.

Before the removal of fuel subsidy, some people could travel to work or school with a small

amount of money. Today, the same journey may cost two or three times more than it used to.

Many students now spend a large part of their pocket money on transportation alone. Some even

miss lectures because they cannot afford the transport fare.The increase in transport fares has also affected traders who travel to buy goods from markets.

Since they spend more on transportation, they increase the prices of their goods so they can make

a profit. In the end, ordinary Nigerians pay more for almost everything they buy.

Effect on Food Prices

Food is one of the basic needs of every human being. Unfortunately, the removal of fuel subsidy

has made food more expensive across the country.

Most food items are transported from villages and farms to cities using vehicles. When the cost

of fuel increased, transporters also increased their charges. Farmers and food sellers had no

choice but to add the extra transport cost to the prices of their goods.

Today, the prices of rice, beans, garri, yam, vegetables, tomatoes, pepper, cooking oil, bread, and

many other food items have increased. Families that could comfortably feed three times a day

now struggle to provide enough food for everyone. Some people have reduced the quantity of

food they buy, while others now skip meals because of the high cost of living.

This situation has affected many children and elderly people because good nutrition has become

difficult for some families to afford.

Effect on Students and Education

Students are among the people greatly affected by fuel subsidy removal. Many students depend

on their parents or guardians for school expenses. As the prices of food, transport, and other

necessities increased, many parents found it difficult to provide enough money for their children.

Some students now trek long distances to school because they cannot afford transport fares every

day. Others combine school with small businesses or part-time jobs just to support themselves.

While there is nothing wrong with working, too much work can reduce the time students have

for reading and preparing for examinations.

The cost of printing assignments, buying textbooks, paying for internet data, and carrying out

academic research has also increased. As a result, learning has become more stressful for many

students.

Some students even consider dropping out of school because their families can no longer meet

their educational expenses. This is one of the most painful effects of the increase in the cost of

living.

Effect on Small Businesses

Small businesses are very important because they provide jobs and help the economy grow.

However, many small business owners have been affected by the removal of fuel subsidy.

Most businesses in Nigeria depend on petrol or diesel generators because electricity supply is not

always stable. Since fuel is now more expensive, business owners spend more money to power

their shops, salons, restaurants, and other businesses.

Many business owners have increased the prices of their products and services to cover these

extra costs. Unfortunately, some customers can no longer afford these higher prices. As a result,

some businesses make fewer sales than before.Some small businesses have even closed down because they can no longer cope with the rising

cost of fuel and other operating expenses. This has also led to job losses in some communities.

Effect on Healthcare

Healthcare has also been affected by fuel subsidy removal. Hospitals and clinics spend more

money on transportation, electricity, and medical supplies because many of them rely on fuel-

powered generators.

Patients who travel from one town to another for treatment now spend more on transport. The

increase in transportation costs has made it difficult for some people to visit hospitals regularly,

especially those living in rural areas.

Some medicines have also become more expensive because transporting them across the country

now costs more. Families with sick relatives often struggle to pay hospital bills and buy

prescribed drugs.

Effect on Family Life

Many Nigerian families have changed the way they spend money since fuel subsidy was

removed. Parents now prepare strict budgets because their income can no longer cover all their

expenses.

Some families have reduced unnecessary spending, while others have postponed important plans

such as building houses, buying land, or expanding their businesses. Family outings and

celebrations have also reduced because people now focus on buying food and paying essential

bills.Despite these challenges, many Nigerians continue to show strength and determination. Families

support one another, neighbours help each other when possible, and many people continue to

work hard with the hope that things will improve in the future.

Positive Effects of Fuel Subsidy Removal

Although many Nigerians have complained about the removal of fuel subsidy because of the

hardship it has caused, some people believe that the policy also has some long-term benefits if it

is properly managed.

One of the major advantages is that the government can save a large amount of money that was

previously used to pay for fuel subsidy. According to government officials, the money saved can

be invested in important sectors such as education, healthcare, road construction, electricity,

agriculture, and job creation. If these funds are managed honestly, many Nigerians will benefit in

the future.

Another positive effect is that the removal of subsidy may encourage investors to build more

refineries in Nigeria. For many years, Nigeria has depended heavily on imported petroleum

products despite being one of the largest producers of crude oil in Africa. With more local

refineries, the country may produce enough fuel to meet local demand, reduce importation,

create jobs, and strengthen the economy.

Fuel subsidy removal may also reduce fuel smuggling. In the past, because petrol was cheaper in

Nigeria than in some neighbouring countries, some people illegally transported fuel across the

borders to sell at higher prices. This caused fuel scarcity and financial losses to the country. With

fuel prices becoming closer to those in neighbouring countries, smuggling may reduce over time.

In addition, some people believe that the policy encourages Nigerians to use fuel more wisely

and look for alternative sources of energy. Businesses and individuals are gradually showing

interest in solar energy and other renewable sources of power. This could help reduce

dependence on petrol generators in the future.

Challenges Nigerians Are Still Facing

Despite these possible benefits, many Nigerians are still facing serious economic hardship. One

of the biggest challenges is inflation. The prices of goods and services continue to increase while

the income of many workers remains the same. This has reduced the purchasing power of many

families.

Another challenge is unemployment. Many young graduates still struggle to find jobs after

completing their education. Some companies have reduced their workforce because of the high

cost of running businesses. This has made life more difficult for many families.

Poverty has also increased in many communities. Some parents now find it difficult to pay

school fees, house rent, medical bills, and other important expenses. Small businesses that cannot

cope with rising operational costs are forced to shut down, leaving many people without a source

of income.

Another issue is the emotional stress caused by the rising cost of living. Many Nigerians worry

about how to provide for their families every day. The pressure has affected the mental and

emotional well-being of many people, especially those with little or no stable income.

Possible Solutions

Although the removal of fuel subsidy has created many challenges, there are practical steps that

can help reduce the hardship experienced by Nigerians.

First, the government should ensure that the money saved from fuel subsidy is used wisely and

transparently. Nigerians need to see visible improvements in roads, hospitals, schools, electricity,

and other public services. This will help people understand the purpose of the policy.

Secondly, more jobs should be created, especially for young people. Government should support

agriculture, small businesses, technology, and vocational training programmes that can provideemployment opportunities. When people have stable jobs and good incomes, they will be better

able to cope with the increase in the cost of living.

The government should also improve public transportation. Affordable and reliable buses and

trains will reduce the burden of high transport costs on workers, students, and traders. This will

also help reduce traffic congestion in major cities.

Another important solution is to support local food production. Farmers should be given access

to loans, fertilizers, modern farming equipment, and good roads. This will increase food

production and help reduce the prices of food across the country.

Electricity supply should also be improved. Many businesses spend a lot of money buying fuel

for generators because of unstable power supply. If electricity becomes more reliable, businesses

will spend less on fuel and the prices of goods and services may reduce.

Finally, Nigerians also have a role to play. Citizens should support local products, avoid wasteful

spending, develop useful skills, and look for legitimate ways to improve their income. Young

people should also focus on education, entrepreneurship, and innovation instead of depending

only on white-collar jobs.

Personal Reflection

As a student, I believe the removal of fuel subsidy has affected almost every Nigerian in one way

or another. Personally, I have noticed that transportation is more expensive than before, food

prices have increased, and many families now struggle to meet their daily needs. Students also

find it more difficult to balance school expenses with the rising cost of living.

However, I also believe that if the government manages the country’s resources honestly and

invests the money saved into meaningful development projects, the economy can improve over

time. Nigerians are hardworking and resilient people. With good leadership, proper planning, and

accountability, the country can overcome these challenges.

CONCLUSION

In conclusion, the removal of fuel subsidy remains one of the most important economic decisions

made in Nigeria in recent years. While the policy was introduced to reduce government

spending, encourage investment, and improve the economy, it has also placed a heavy burden on

many ordinary Nigerians.

The increase in fuel prices has affected transportation, food, education, healthcare, businesses,

and family life. Many people are finding it difficult to cope with the rising cost of living. At the

same time, the policy has the potential to bring long-term benefits if the money saved is properly

managed and invested in projects that directly improve the lives of citizens.

For Nigeria to move forward, there must be honesty, transparency, and commitment from both

the government and the citizens. If everyone plays their part, the country can build a stronger economy and create a better future for both present and future generations.

Written by:

OBASI CHIDIMMA ESTHER

(Department of English and Literary Studies, Delta State University, Abraka)