The Assessment of Impacts of 2016 Fuel Subsidy Removal on Low Income Earners in Katsina Metropolis, Nigeria

Abstract

Fuel subsidy removal in Nigeria has been ongoing, and attempts were made by several government regimes in Nigeria right from 1980 – 2016, which led to an increase in the pump price as well as the price of commodities. The study adopts a survey research design, and 384 respondents were used as a sample, using a self-administered questionnaire and a semi-structured questionnaire to collect data from the respondents. The study uses a multinomial logit model to estimate the significance of the factors believed to influence a household’s income in the Katsina metropolis, and the result shows that there is a significant relationship between the dependent variable and independent variable in the final model with chi-square value of 155.945. The likelihood ratio test proves that the independent or predictor variables family size (0.04 < p-value) and educational qualification (0.000 < p-value) of respondents were significant, which proves that the predictors contribute significantly to the final model. Some recommendations were made as to why the government should ensure that subsidy reinvestment programmers meet the target that was set to achieve through leasing some of the administrative bottlenecks that hinder people who are vulnerable to getting the scheme and embark on public awareness campaigns on the existence of most of the important program that can significantly relieved most people at the bottom.