Impact of Fuel Subsidy Removal on Logistic Companies in Delta State, Nigeria

The removal of fuel subsidies in Nigeria has had significant repercussions on logistics companies in Delta State. The immediate consequence was a substantial increase in fuel prices, with petrol costs escalating by over 300% following the subsidy removal in May 2023. This surge led to a marked rise in operational expenses for logistics firms, compelling many to adjust their pricing structures to sustain profitability. This study investigated the negative impact of fuel subsidy removal on logistics companies in Delta State. The study adopted the Resource Dependency Theory (RDT) to explain how external resources influence the behaviour and survival of organisations. Simple percentage and chi-square were used to test the hypotheses, while 102 sampled respondents completed a structured questionnaire that was used to collect data from respondents. The study finds that fuel subsidy removal has led to the closure of many logistic companies in Delta State, slowed down the speed of logistic firms’ service delivery in Delta State and has affected the distance or root cover by logistic companies in Delta State. The study recommended, among others, the need for Government and industry stakeholders to initiate targeted support programs such as tax relief, grants, or subsidised loans to help logistics firms adjust to the new fuel pricing regime and sustain their operations.