Fuel Subsidy Removal and Its Effect on the Price of Cement in Bida, Niger-State

A Trend Analysis

Abstract

The removal of fuel subsidies is a sensitive issue that many Nigerians care deeply about because it affects the economy. In January 2012, the government attempted to de-regulate gasoline prices, more than doubling them at retail. Following the price increase, trade unions staged an eight-day strike, estimated to cost the economy over US$1 billion. The government reduced gasoline prices to ₦97 (US$0.60) per litre within two weeks. On May 29, 2023, the Nigerian government announced the complete elimination of fuel subsidies, thus causing the most immediate negative impact in inflation caused by the sharp rise in transportation costs. The increase in transportation costs has clearly influenced the price of building materials. The purpose of this study was to asess the trend of cement prices following the removal of fuel subsidies in Bida town, Niger State. The data for this research was gotten from archival data (sales record book) of some cement sellers in Bida Town and was analysed using microsoft line analysis to shiow the trends. The study found out that the price of cement always increase with little steady amount over the months with December having the highest amount in the study period. Cement price decrease after December in the pre- subsidy removal era while it increased steadily and significantly in the subsidy removal era with the highest amount being N8850 in March 2024. The study concluded that the steady increase in the price of cement in the fuel subsidy removal era could not completely be linked to the removal of fuel subsidy only. The study recommends that government should take the enforcement of price control policies seriously as this is very important to be able to keep the price of cement within the most reasonable range possible.