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Fuel Subsidy Removal: 7 In 10 Nigerians Lament the Negative Impact


Support, Impact, Costs and Suggestion on Fuel Subsidy Removal
Infographics on Fuel Subsidy Removal

Abuja, Nigeria. July 11, 2023 – A new public opinion poll conducted by NOIPolls has revealed that 73 percent of adult Nigerians nationwide lamented the negative impact of subsidy removal as the fuel cost has affected their spending on other commodities. Additionally, 10 percent of adult Nigerians disclosed they can no longer sustain their businesses, another 10 percent complained that they now spend more on transportation fares while 3 percent criticized the high cost of goods and services.


As a coping mechanism, 2 percent revealed that they have reduced their spending while another 2 percent indicated that they have also reduced the number of days they work. On the flip side, 5 percent of Nigerians claimed the removal of subsidy has no impact on them.


According to the Daily Post Newspaper publication of 4th July 2023, it stated that the citizens are grappling with the effect of fuel subsidy removal, increasing the prices of transportation and goods and services[1]. More findings from the polls revealed 52 percent of Nigerians believe the fuel subsidy removal is not worth the impact. Also, 50 percent disclosed that they are unable to buy fuel at its current price range of #537- #549 as it is too expensive for them.


With regards to recommendations, 22 percent advised that the Federal Government should increase the minimum wage and salaries to cushion the effect of the fuel subsidy removal. Other suggestions include ensuring a uniform price of fuel across Nigeria (16 percent), provision of buses to subsidize transportation (8 percent), fixing non-functional refineries (6 percent), and creation of empowerment programs (5 percent). These are some of the key findings from the Fuel Subsidy Poll conducted in the week commencing 9th June 2023.


Survey Background

At his inauguration on Monday 29th of May 2023, President Tinubu announced the total removal of the highly controversial fuel subsidy resulting in high prices and long queues nationwide.[2] Given the announcement, there were concerns as Nigerians rushed to buy fuel before its cost increases even further. The fuel price was expected to jump from the official pump price of 185 naira to between 350 and 550 naira.[3] To the dismay of Nigerians, petrol stations immediately increased pump prices upon hearing the announcement. This poll was carried out before the current fuel price of 617 naira per litre.


Successive administrations attempted to remove the subsidy but failed to do so because it is widely popular among citizens, many of whom consider it their major – or only – benefit from the federal government.[4] It gradually became a heavy burden to the government as the cost of maintaining the subsidy increased over the years. Subsidy payments have always been thwarted by issues of corruption and a lack of fiscal transparency. According to a news report, in 2012, a 200-page report released by a parliamentary inquiry uncovered a $6bn fraud, involving officials at the state-run Nigerian National Petroleum Company (NNPC) – now a limited company.[5] Since then, Governors and Members of Parliament have routinely called for an investigation into NNPC and a review of subsidy payments to oil marketers.

Furthermore, ahead of the February 2023 election, all four major Presidential candidates promised to remove the fuel subsidy and introduce oil sector reforms in their manifesto, signifying a consensus among the political class to do away with the assistance.[6] Against this background, NOIPolls conducted a poll to feel the pulse of Nigerians regarding petrol subsidy removal and hereby presents its findings.


Survey Findings

The first question sought to gauge the awareness of Nigerians on the fuel subsidy removal by the Federal government. Findings revealed a vast majority (95 percent) of adult Nigerians nationwide responded in the affirmative. This response cuts across gender, geographical locations, and age-group with at least 92 percent representation. On the other hand, 5 percent of the respondents stated otherwise.


Chart showing the level of awareness of Subsidy Removal
Awareness of Subsidy Removal

Furthermore, respondents were asked if they are in support of fuel subsidy removal. The poll result showed that 55 percent of the respondents affirmed that they are in support of fuel subsidy removal. The South-West zone (74 percent) accounted for the highest number of respondents with this assertion. On the contrary, 45 percent of respondents indicated that they are not in support of the decision.

Percentages showing support for Subsidy Removal
Support for Subsidy Removal

Similarly, when asked why they support the removal of fuel subsidies, the survey revealed that a higher number of respondents believe that the decision will curb corruption in the oil industry (30 percent). In addition, 28 percent said that it will help grow other sectors of the economy. Other reasons mentioned include it will reduce government spending/borrowing (6 percent), it will regulate fuel prices in the future (6 percent), everybody will benefit from it (6 percent), it will help reduce oil theft (5 percent), it will help fix our refineries (4 percent), subsidy money will be used to create jobs (4 percent), and it will lead to product availability (3 percent).

Chart showing why Nigerians support fuel subsidy removal
Reasons Nigerians Support Fuel Subsidy Removal

On the contrary, further analysis showed 40 percent of respondents who do not support the fuel subsidy removal cited reasons as because it caused high prices of goods and services. Other reasons stated include increased hardship and suffering (38 percent), timing being too sudden (5 percent), no measure put in place to cushion the effect (4 percent), the high price of fuel (3 percent), and that it has affected businesses negatively (3 percent).


Reasons Nigerians are not in support of Subsidy Removal
Reasons Nigerians do not Support Subsidy Removal

Subsequently, the survey sought to know how the removal of fuel subsidy has impacted the daily activities of Nigerians. A larger proportion (73 percent) of adult Nigerians revealed that it has caused an increase in their spending while 10 percent lamented that they can no longer sustain their business. 10 percent revealed that it has caused an increase in transportation fares amongst other mentions. Interestingly, 5 percent of the respondents interviewed revealed that fuel subsidy removal has no impact on them.


Cited impacts of fuel subsidy removal on citizens
Impact of Fuel Subsidy Removal

To find out whether the removal of fuel subsidy is worth the impact or not, the poll posed the question to citizens; ‘’ Do you think the removal of fuel subsidy is worth the impact? Analysis shows a mixed reaction as 47 percent of Nigerians believe the removal of subsidy is worth the impact, while 52 percent do not think the removal of fuel subsidy is worth the impact.


Worth of fuel subsidy removal on citizens
Assessment on the Impact of Fuel Subsidy Removal

Consequently, the survey measures the opinions of citizens on the price they would no longer be able to afford to buy fuel. The poll result showed that half of the respondents (50 percent) disclosed that they consider the price range ₦537 – ₦549 too high for them to pay.

Price considered too high to buy fuel
Perception on Cost of Fuel/Petrol

With regards to what should be done to reduce the ripple effect of fuel subsidy removal, 22 percent of respondents advised the Federal Government to increase the minimum wage and salaries. While 16 percent suggest uniformity in petrol pump prices across the country, 8 percent want the government to provide buses to subsidize transport. Also, 12 percent advocated that government should fix non-functioning refineries and regulate food prices, 5 percent suggested that the government should create empowerment programs to improve the economy amongst others


Reducing effects of Fuel Subsidy
Suggestions on Reducing effects of Fuel Subsidy Removal

Conclusion

In conclusion, the poll has shown that Nigerians are aware the federal government has removed fuel subsidies. It is also worthy of note 73 percent of Nigerians reported that subsidy removal has impacted their daily activities causing an increase in their spending pattern.


Although 55 percent of Nigerians revealed that they support the removal of subsidies, 22 percent recommend the federal government should increase the minimum wage and salaries, while 16 percent advised that the government should ensure a uniform price of fuel across the country. Additionally, 8 percent suggested that the federal government should provide buses to subsidize transportation.


Finally, the federal government should take urgent steps to cushion the effects of fuel subsidy removal given the ripple effect on people’s spending patterns, ensure accountability for monies accrued from fuel subsidies and ensure proceeds are used for the overall development of the nation.


Survey Methods

The opinion poll was conducted in the week commencing 9th of June 2023. It involved telephone interviews of a proportionate nationwide sample of 1,000 randomly selected phone-owning Nigerians aged 18 years and above, representing the six geo-political regions and 36 states, and the FCT of the country. Interviews were conducted in 5 languages – Igbo, Hausa, Yoruba, Pidgin English, and English. Although we can say with 95% confidence that the results obtained were statistically precise – within a margin of error of plus or minus 4.65%; we recognize that the exclusive use of telephone polling has its limitation of excluding non-phone-owning Nigerians. Nonetheless, with the country’s tele density put over 100 percent by the Nigerian Communications Commission (NCC), we consider our telephone polling approach appropriate. Also, given the rigorous scientific process of randomization and stratification applied, we can confidently stand by the validity of our methodology and approach. NOIPolls Limited, No. 1 for country-specific polling services in West Africa. We conduct periodic opinion polls and studies on various socio-economic and political issues in Nigeria. More information is available at www.noi-polls.com.


Disclaimer

This press release has been produced by NOIPolls Limited to provide information on all issues which form the subject matter of the document. Kindly note that while we are willing to share results from our polls with the public, we only request that NOIPolls be acknowledged as authors whenever and wherever our poll results are used, cited, or published. NOIPolls hereby certifies that all the views expressed in this document accurately reflect the views of respondents surveyed for the poll, and background information is based on information from various sources that it believes are reliable; however, no representation is made that it is accurate or complete. Whilst reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or facts, or any views expressed herein by NOIPolls for actions taken because of information provided in this report. Any ratings, forecasts, estimates, opinions, or views herein constitute a judgment as of the date of this document. If the date of this document is not current, the views and content may not reflect NOIPolls' current findings and/or thinking.


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1 https://dailypost.ng/2023/07/04/fuel-subsidy-removal-n400bn-savings-raises-questions/ [2] https://www.aljazeera.com/news/2023/5/31/nigeria-fuel-subsidy-cut-spiralling-costs-all-you-need-to-know [3] https://www.aljazeera.com/news/2023/5/31/nigeria-fuel-subsidy-cut-spiralling-costs-all-you-need-to-know [4] https://www.aljazeera.com/news/2023/5/31/nigeria-fuel-subsidy-cut-spiralling-costs-all-you-need-to-know [5] https://www.aljazeera.com/news/2023/5/31/nigeria-fuel-subsidy-cut-spiralling-costs-all-you-need-to-know [6] https://www.aljazeera.com/news/2023/5/31/nigeria-fuel-subsidy-cut-spiralling-costs-all-you-need-to-know

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