Abstract:

The persistent reliance on fuel subsidies in Nigeria and the subsequent removal of the policy have generated significant economic challenges, particularly for households at the state and local government levels. In Benue State, the removal of the fuel subsidy has led to a sharp increase in the cost of living and a noticeable decline in households' purchasing power, raising concerns about residents' ability to afford basic goods and services. It is against this backdrop that this study examines the effect of fuel subsidy removal on the purchasing power of households in Benue State. The study adopts a descriptive research design, using structured questionnaires and key informant interviews as data-collection instruments, while social conflict theory serves as the theoretical framework for analysis. Findings reveal that fuel subsidy removal has significantly increased transportation costs and the prices of essential commodities, thereby placing greater financial pressure on households. The study shows that rising intra-city transport fares and higher costs of goods have reduced household consumption capacity and weakened overall purchasing power. Although government palliative measures were introduced, the study finds that their impact in cushioning these economic pressures has been minimal. The study therefore recommends the implementation of transparent, targeted, and effective palliative programmes aimed at improving household’s welfare and mitigate the adverse effects of fuel subsidy removal on purchasing power of Benue citizens.