NEOLIBERAL FUEL SUBSIDY REFORMS: IMPACT ON COMMERCIAL DRIVERS

Abstract

This study provides a nuanced analysis of the micro-level socio-economicconsequences of fuel subsidy removal in rural Nigeria, focusing on commercial drivers inAgwada, Nasarawa State. Grounded in Welfare Economics Theory (WET), the research offersa comprehensive framework for understanding the welfare and distributional effects of sucheconomic policies. Employing a mixed-methods approach, the study combines primary data,obtained through structured questionnaires administered to commercial drivers at MararabaAgwada motor park, with secondary data from peer-reviewed scholarly sources and reputabledigital databases. Quantitative analysis of the survey data reveals that fuel subsidy removal hassignificantly increased fuel prices, resulting in an over 50% rise in operational costs and acorresponding decline in drivers’ earnings. These economic pressures have led to reduceddisposable income, increased indebtedness, depleted savings, and restricted access tohealthcare for drivers and their families. At the community level, the cascading effects includesuppressed market activities, declining school enrolment, and reduced employmentopportunities in vehicle maintenance. Despite adopting coping mechanisms such as fareincreases, route optimization, income diversification, and extended work hours, driverscontinue to face substantial economic hardships. The study underscores the need for targetedinterventions, including low-interest loans, infrastructure development, affordable healthcareinsurance, and reinstated fuel subsidies. These policy recommendations aim to alleviate theeconomic burden on commercial drivers and promote socio-economic stability and resiliencewithin their communities.