Effect of Fuel Subsidy Removal on Socio-Economic Activities of Households in Fakai Local Government Area, Kebbi State, Nigeria

This study examined the effect of fuel subsidy removal on the socio-economic activities of households in Fakai Local Government Area (LGA) of Kebbi State, Nigeria. Fuel subsidy removal, pursued by successive Nigerian governments as part of broader fiscal reform, has generated considerable national debate, with rural households often bearing a disproportionate share of the resulting hardship because of weaker economic resilience and limited livelihood diversification. The study adopted a descriptive survey design and drew primary data from 384 household heads selected through a stratified random sampling technique, with the sample size determined from an estimated population of 230,652 using the Taro Yamane (1967) formula. Data were analysed using descriptive statistics (frequency counts and percentages) and the chi-square test of independence at the 5 percent significance level. The results show that fuel subsidy removal significantly raised transportation costs, food prices and the operating expenses of household-based enterprises, thereby eroding household income and purchasing power. In response, households reduced spending on non-essential goods, substituted cheaper alternatives for preferred goods, and adopted coping strategies such as reduced travel, bulk buying and engagement in supplementary income-generating activities. Chi-square results confirmed statistically significant relationships between fuel subsidy removal and household economic well-being (χ² = 42.78, df = 2), consumption patterns (χ² = 37.46, df = 2), and coping strategies (χ² = 29.85, df = 2), all at p < 0.05. The study concludes that although fuel subsidy removal may support long-run fiscal sustainability, its short-run socio-economic costs are severe for rural, agrarian communities such as Fakai LGA. It recommends targeted cash transfers, investment in rural transportation infrastructure, support for small household enterprises, promotion of alternative energy sources, and a phased approach to future fuel price adjustments accompanied by adequate public sensitisation.