IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF MARKETING AND COMMUNICATION STUDIES (IJMCS )

E-ISSN 2545-5273
P-ISSN 2695-2173
VOL. 8 NO. 4 2024
DOI: 10.56201/ijmcs.v8.no4.2024.pg69.82

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Effect of Fuel Subsidy Removal on Food Prices and Consumer Purchase Behaviour in Abia State: A Market Dynamics Perspective

Obasi, C. Daniel, Chiana, Cyril Anamelechi, Ph.D, Benson-Eluwa Virginia, Ph.D

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Abstract

To evaluate and better understand the effect of fuel subsidy removal on food prices and consumer purchase behaviour in Abia State: A market dynamics perspective, the study focused on civil servants, lecturers, students, transporters, businesspeople, farmers, and self- employed people who live in Umuahia and Aba metropolitans of Abia State. The study uses both primary and secondary sources of data extensively. Using Topman’s formula, the sample size of 196 respondents was established. With the help of Statistical Package for Social Sciences (SPSS) version 23.0, Ordinal Least Square (OLS) was used to test the presented hypotheses at a 5% level of significance. According to the study, fuel subsidy removal has a significant and positive effect on food prices in Abia State; also, the removal of fuel subsidies has a significant and positive impact on food purchases in Abia State. Again, there is a significant and positive effect of fuel subsidy removal on consumer purchase behaviour in Abia State. In conclusion, the removal of the fuel subsidy has led to higher food prices, which has in turn affected food purchasing and overall consumer purchase behaviour in Abia State. The study recommended that the government and policymakers in Abia State should implement targeted support programs, such as subsidized food vouchers or direct cash transfers, specifically for low-income households to help them manage increased costs while maintaining access to essential items, such as food.

keywords:

Effect, Fuel Subsidy, Food Prices, Consumer Purchase Behaviour, Market Dynamics.

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