An Analysis of the Effects of Fuel Subsidy Removal on Cost of Transportation in Northern Nigeria

This paper analyses the effects of fuel subsidy removal on transportation costs and its associated socioeconomic consequences in the region. The removal of fuel subsidy in Nigeria has generated significant debate due to its implications for transportation costs and socioeconomic welfare, particularly in Northern Nigeria, where road transport serves as the primary means of movement for people and goods. The study adopted a desk review methodology, relying on secondary data obtained from scholarly publications, government reports, policy documents, and institutional publications. The review revealed that the removal of fuel subsidy resulted in a sharp increase in the pump price of Premium Motor Spirit (PMS), leading to higher passenger fares, freight charges, and logistics costs. The findings further indicate that rising transportation costs have adversely affected agricultural production, commercial activities, household welfare, and access to healthcare, education, and markets. The policy has also contributed to inflation, declining purchasing power, and increased socioeconomic hardship, particularly among farmers, traders, students, and low-income households. Although fuel subsidy removal is expected to promote fiscal sustainability and improve long-term economic efficiency, the study concludes that its short-term effects have imposed substantial socioeconomic burdens on Northern Nigeria. The paper recommends targeted social protection programmes, investment in transport infrastructure, agricultural support, affordable public transportation, and transparent utilization of subsidy savings to mitigate the adverse effects of the policy while promoting inclusive and sustainable economic development.