EFFECTS OF FUEL SUBSIDY REMOVAL ON CONSUMPTION BEHAVIOUR AND SOCIO-ECONOMIC WELLBEING OF PRIMARY SCHOOL TEACHERS IN NIGERIA

Abstract

The study examined the effects of fuel subsidy removal on consumption 
behaviour and socio-economic well-being of primary school teachers in Nigeria 
using the theoretical research design. The study is anchored on the Social 
Exchange theory which views consumption behaviour as a form of social 
exchange where individuals weigh the costs and benefits of their consumption 
decisions. The paper observed that the removal of fuel subsidy has remained a 
controversial issue in Nigeria with strong arguments for and against the policy. 
What is clear, however, is that this policy has had a significant impact on the 
consumption behaviour and socio-economic wellbeing of primary school 
teachers in Nigeria. The paper identified some of the changes in consumption 
behaviour of the populace, occasioned by the removal of subsidy. These include, 
but not limited to a sharp decrease in disposable income which has led to a 
significant cut back on spending, inability to eat balanced diet as a result of 
soaring prices of food items, and inability to afford transportation cost, due to 
high prices of fuel. Other changes in consumption behaviour resulting from 
subsidy removal include panic buying and hoarding of petroleum products and 
food items, increase in demand for alternative sources of energy, and a sharp 
increase in general cost of living. The paper also observed that the removal of 
fuel subsidy will likely lead to a decrease in investment and a slowdown in 
economic growth. The paper concluded that the removal of fuel subsidy has 
adversely affected the socio-economic well-being of Nigerian workers 
particularly primary school teachers. As a result of this, it was advocated that the 
government put in place sustained palliative to cushion the effects of subsidy 
removal on teachers. These should include a significant increase in minimum 
wage of Nigerian workers, prompt and regular payment of salaries, a review of 
the multiple taxation policy, and the provision of basic amenities such as good 
roads, access to quality health care, among other things.