The impact of President Bola Tinubu’s fuel subsidy removal on household income in Kano West, Kano State
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Background of the Study
In 2023, President Bola Tinubu’s administration made a bold decision to remove the fuel subsidy, a move aimed at freeing up resources for other development priorities and tackling inefficiencies in the oil sector. The subsidy, which had long been a drain on the federal budget, had shielded consumers from the full cost of petroleum products, particularly petrol. The removal of the subsidy led to a sharp rise in fuel prices across the country, sparking significant debate over its potential impact on the economy and household incomes.
Kano West, a largely agrarian and industrial area in Kano State, is significantly impacted by fuel prices. The region, home to a large proportion of low-income households, relies heavily on transportation and energy for daily activities, particularly in the agricultural and informal sectors. The increase in fuel prices, following the removal of the subsidy, raised concerns about inflation and reduced disposable income. This study will assess the direct effects of the fuel subsidy removal on household incomes in Kano West, specifically examining the strain on low-income families and changes in spending behavior.
Statement of the Problem
The removal of the fuel subsidy has led to sharp increases in the prices of goods and services, particularly transportation costs, which are a significant component of household expenditure in Kano West. These price hikes have the potential to erode household income, leading to reduced purchasing power and economic hardship, particularly for those in lower income brackets. While the government has stated that the subsidy removal will lead to long-term economic benefits, it remains unclear how the immediate effects will be felt by households in regions like Kano West, where the economy is highly dependent on transportation and energy costs.
Objectives of the Study
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To assess the impact of the fuel subsidy removal on household income in Kano West.
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To evaluate the changes in household spending patterns following the subsidy removal.
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To examine the socio-economic challenges faced by households in Kano West as a result of the fuel subsidy removal.
Research Questions
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How has the fuel subsidy removal affected household income in Kano West?
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What changes have occurred in household spending patterns following the subsidy removal in Kano West?
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What socio-economic challenges have households in Kano West faced as a result of the fuel subsidy removal?
Research Hypotheses
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The removal of the fuel subsidy has significantly reduced household income in Kano West.
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The fuel subsidy removal has caused significant changes in household spending patterns in Kano West.
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Households in Kano West have faced significant socio-economic challenges due to the fuel subsidy removal.
Scope and Limitations of the Study
This study will focus on the impact of the fuel subsidy removal on household incomes and spending patterns in Kano West. The scope will be limited to the economic effects experienced by households in this region, particularly among low-income groups. The study will not cover other regions or consider the long-term macroeconomic effects of the subsidy removal.
Definitions of Terms
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Fuel Subsidy Removal: The policy decision to eliminate government subsidies on fuel prices, which had previously kept the cost of petrol below market value.
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Household Income: The total income received by all members of a household from all sources, including wages, business income, and government transfers.
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Socio-Economic Challenges: The difficulties faced by households in terms of economic survival, access to services, and overall well-being, particularly as a result of rising costs of living.
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