THE IMPACT OF SUBSIDY REMOVAL ON THE EFFICACY AND ADOPTION OFCASUAL CARPOOLING SCHEMES IN NIGERIA

Abstract

This study analyses the impact of fuel subsidy removal on the adoption and effectiveness of casual carpooling schemes in Nigeria. Historically, fuel subsidies have provided short-term price stability at the cost of long-term fiscal, governance, and environmental challenges. The removal in 2023 led to a sharp increase in fuel prices, prompting commuters to explore cost-sharing options, such as carpooling. A cross-sectional survey was conducted to assess hypothesised relationships among economic factors, effectiveness, perception, subsidy removal, and carpooling adoption using Partial Least Squares Structural Equation Modelling (PLS-SEM). Results indicate that financial pressures and the withdrawal of subsidies have a positive and significant influence on carpooling behaviour, while effectiveness and perception did not have direct significant impacts, though their indirect effects were notable. The moderation analysis also shows that gender and income significantly influence the relationship between subsidy removal and carpooling adoption, whereas age and educational qualification are not significant moderators. These findings underscore the role of subsidy reforms in changing travel behaviours and positioning carpooling as a sustainable transportation option. The research recommends awareness campaigns, supportive policies, and technological platforms to boost carpooling adoption.