Influence of Fuel Subsidy Removal and Poor Remuneration on the Job Performance of Academic Staff of Tertiary Institutions in Oyo Metropolis

Influence of Fuel Subsidy Removal and Poor Remuneration on the Job Performance of Academic Staff of Tertiary Institutions in Oyo Metropolis

Rasheedat Adebola Ashmowiy (PhD), Mary Oluwabukola Faremi, Rukayat Olanite Kareem, Biliqis Olanike Dauda, Basirat Opeyemi Wahab

Department of Educational Foundations, School of Education, Federal College of Education (Sp), Oyo

DOI: https://dx.doi.org/10.47772/IJRISS.2025.906000253

Received: 29 May 2025; Accepted: 05 June 2025; Published: 10 July 2025

ABSTRACT

This study examines how the removal of fuel subsidies and insufficient compensation affects the performance of academic staff in higher education institutions located in the Oyo metropolis. A descriptive survey research design was utilized to collect data from 295 academic staff, selected via stratified random sampling from three tertiary institutions. The study employed Pearson Product Moment Correlation in conjunction with multiple regression analysis to thoroughly analyze the data. The results demonstrate that eliminating fuel subsidies has a significant negative effect (r = -0.981, p < 0.05) on job performance, leading to increased transportation costs, financial strain, and reduced effectiveness in both teaching and research activities. Moreover, insufficient compensation revealed a significantly negative impact (r=-0.991,p <0.05), resulting in job dissatisfaction, absenteeism, and reduced academic productivity. The relationship between the removal of fuel subsidies and insufficient compensation accounted for 98.3% of the variance seen in job performance (R² = 0.983, p < 0.05). Regression analysis indicated that insufficient compensation (β = 0.805) had a more pronounced effect on job performance than the elimination of fuel subsidies (β = 0.189). The findings indicate that the removal of fuel subsidies and lack of adequate compensation significantly hinder the performance of academic staff, with insufficient salaries proving to be the more impactful factor. The proposal advocates for a comprehensive review of salary structures by the government, the implementation of transportation allowances, and the development of robust welfare initiatives to ease financial burdens and enhance performance in academic positions.

Keywords: Fuel subsidy removal, poor remuneration, job performance, academic staff, tertiary institutions, Nigeria.

INTRODUCTION

The effectiveness of academic staff plays a vital role in determining the quality of education and the overall success of higher education institutions. The faculty members are essential in higher education, significantly contributing to the achievement of institutional goals and maintaining high educational standards. Nonetheless, the performance of individuals seems to be influenced by a variety of factors, including both economic and organisational elements. Recently, the academic sector has encountered significant challenges due to external economic pressures, such as the removal of fuel subsidies and insufficient compensation packages. Concerns have been raised about the potential negative impacts of these challenges on the motivation, productivity, and job satisfaction of academic personnel. The increased expenses associated with living and commuting significantly impede their ability to operate effectively.

Tertiary education, according to the National Policy on Education FRN (2014), encompasses the educational opportunities available following basic education across a range of institutions. This includes universities, inter-university centres, the Nigeria French Language Village, Nigeria Arabic Language Village, the National Institute of Nigerian Languages, Innovation Enterprise Institutions (IEIs), Colleges of Education, Monotechnics, Polytechnics, and various specialised institutions such as Colleges of Agriculture, Schools of Health and Technology, and the National Teachers’ Institutes (NTI). The aim of higher education is to provide students with essential knowledge and skills for independence and employment, tackle skill gaps in the workforce, encourage academic pursuits, entrepreneurship, and community involvement, strengthen national cohesion, and improve both national and global comprehension through the acquisition of knowledge and skills. Higher education institutions serve three primary purposes: instruction, investigation, and community engagement. The purpose of these activities is to foster the growth of human resources through the acquisition of knowledge and skills, while also disseminating this knowledge to promote the advancement and progress of society (Usoro, 2016). The academic staff at institutions of higher learning has been recognised for their outstanding work, showcasing a remarkable level of dedication, expertise, and commitment to achieving excellence.

Job performance pertains to the degree to which lecturers meet their responsibilities in teaching, research advancement, and community engagement. The tasks and activities outlined are structured to improve student learning outcomes and support them in reaching their academic objectives. Owan et al (2020) contend that the job performance of academic staff pertains to the extent to which members of a tertiary institution execute various responsibilities, including teaching, research, and community service. Recently, the elimination of fuel subsidies has profoundly affected the academic personnel within higher education institutions. This encompasses adverse impacts on research activities, publication efforts, class attendance, invigilation duties, and the supervisory roles of lecturers. Furthermore, it has resulted in heightened financial difficulties stemming from stagnant wages and rampant inflation. Okonkwo’s (2023) study indicates that the removal of fuel subsidies adversely affects academic staff, leading to increased transportation expenses for their daily commutes. A considerable portion of lecturers relies on public transport options such as buses, taxis and motorbikes, which have adjusted their fares due to the rising fuel costs. Achieving optimal performance appears unattainable given the noticeable decrease in work performance among academic personnel in higher education institutions.

The elimination of fuel subsidies has resulted in a significant rise in fuel prices, intensifying inflation and elevating the cost of living. In June 2024, the average retail price of Premium Motor Spirit (petrol) reached ₦750.17 per litre, marking a 37.44% increase from June 2023. As of September 2024, fuel prices reached ₦897 per litre, reflecting a significant increase of 50.1% from ₦598 per litre at the beginning of the year. The price of fuel has increased to ₦897 per litre, representing a 50.1% rise from ₦598 per litre earlier this year. The rising fuel costs have had a direct impact on academic personnel, a significant number of whom depend on personal vehicles or public transit for their daily commutes. The rise in transportation costs, alongside unchanging salaries, has heightened financial pressures, which could result in lower class attendance, a decline in research activities, and a reduction in supervisory roles.

The challenges are further exacerbated by the issue of inadequate staff remuneration. The compensation framework for academic personnel in federal universities is regulated by the Consolidated University Academic Salary Structure (CONUASS). In 2024, the yearly compensation for academic roles is as follows: Academic rank (CONUASS 07): ₦4,580,349 to ₦6,020,163, Reader (Associate Professor, CONUASS 06): ₦3,768,221 to ₦5,004,750. Senior Lecturer (CONUASS 05): ₦3,091,505 to ₦4,455,506. Lecturer I (CONUASS 04): ₦2,079,996 to ₦2,684,010 and Lecturer II (CONUASS 03): ₦1,649,509 to ₦1,979,640, (National Bureau of Statistics, 2023). Despite these figures, numerous academic professionals indicate that their salaries have not aligned with the increasing cost of living, resulting in financial difficulties. The average monthly salary for members of the Academic Staff Union of Universities (ASUU) varies between ₦137,459 and ₦501,680, resulting in an average of ₦319,569.50. In light of the rising costs associated with inflation and fuel price increases, these salaries frequently fall short of covering everyday necessities. A study carried out in 2022 by Ephrahem, Okendo, and Salema investigated how various components of teachers’ remuneration packages influence their commitment to their roles in public secondary schools located in the Arusha Region of Tanzania. The investigation revealed that the insufficient allocation of various elements within teachers’ compensation packages was the main factor contributing to low levels of commitment among educators.

Furthermore, Mohammed, Hashim & Mansur (2018) indicated that inadequate compensation has led to increased rates of staff turnover in academic settings. When educators observe that their financial needs are not being sufficiently met, they may seek more rewarding opportunities elsewhere, whether within the same domain or in completely different industries. This turnover obstructs the continuous advancement of academic programs and affects the institution’s ability to maintain a stable and informed faculty. Increased levels of employee turnover can lead to higher costs associated with recruitment and training, alongside a loss of institutional knowledge and expertise, which may further compromise the quality of educational and research results.

Akambi and Akinwande (2019) confirmed that numerous highly skilled academic professionals had chosen to leave their roles in public institutions in pursuit of more lucrative job opportunities elsewhere. Ige (2019) pointed out that the turnover of academic staff brings about various disadvantages, such as the financial strain linked to diminished organisational loyalty, the loss of institutional knowledge and expertise, and the increased time and costs needed for training new faculty members. Ige (2019) observed that the exit of scholars indicates a reduction in the impact and scope of knowledge generation and dissemination. The reduction in personnel within tertiary institutions may be linked to the discontent among academic staff.

Suraj (2018) contends that insufficient compensation hinders the professional development and research capabilities of academic staff. Limited financial resources impede access to essential academic materials, including publications, research funding, and opportunities for professional growth. This may obstruct innovation and slow down the advancement of understanding within the organisation. Moreover, the faculty members found themselves needing to take on additional jobs or consulting roles to increase their earnings, which consequently reduced the time and energy they could dedicate to their primary academic responsibilities. The change in focus will negatively impact the quality of their teaching and academic contributions, ultimately undermining the reputation of the institution and its ability to attract and retain top-tier faculty and students.

This study draws upon Herzberg’s Two-Factor Theory. Herzberg’s Two-Factor Theory offers a lens through which to understand how the removal of fuel subsidies and insufficient compensation can lead to dissatisfaction among academic staff in higher education, subsequently affecting their job performance. In 1959, Frederick Herzberg put forth the Motivation-Hygiene Theory, commonly known as Herzberg’s Two-Factor Theory. The hypothesis suggests that work satisfaction and dissatisfaction are shaped by two distinct groups of factors. Frederick Herzberg suggests that motivators, or satisfiers, are intrinsic to the profession and lead to positive job satisfaction. These elements include achievement, recognition, the essence of the task, accountability, advancement, and the potential for individual development. The presence of these elements leads to increased motivation, satisfaction, and efficiency among employees. On the other hand, hygiene factors, often referred to as dissatisfier, exist outside the job itself. While they may not directly contribute to job satisfaction, their lack or inadequacy can lead to feelings of discontent in the workplace. Hygiene involves multiple elements, including organisational policies, oversight, remuneration, social dynamics, workplace conditions, and employment stability. Although these elements play a significant role in reducing unhappiness, they do not necessarily lead to positive satisfaction or motivation.

Acquiring a thorough insight into the joint effects of eliminating fuel subsidies and inadequate compensation on job performance is essential for formulating effective strategies that could mitigate these adverse outcomes and improve the working conditions of academic staff. To achieve this objective, the study will investigate the effects of fuel subsidy elimination and insufficient compensation on the work performance of academic personnel in tertiary institutions within the Oyo metropolitan area.

Statement of the Problem

The recent elimination of fuel subsidies in Nigeria, along with inadequate compensation for academic personnel, has generated considerable apprehension about its effects on the professional efficacy of educators within higher education institutions. The removal of fuel subsidies has led to a notable rise in transport costs, thereby exacerbating the financial strain on academic staff, which is already contending with insufficient salaries and limited benefits. This situation has resulted in increased stress, financial difficulties, and a decline in morale, which may impede their capacity to adequately perform their teaching, research, and administrative duties. A significant number of academic personnel depend extensively on personal vehicles, given the frequently insufficient public transport networks in regions housing higher education institutions, thereby exacerbating the effects of escalating fuel costs. Prior research has thoroughly investigated the relationship between job satisfaction and performance concerning salary frameworks and working environments within Nigerian tertiary institutions. Nevertheless, the majority of current studies have not explicitly examined the intricate interplay between the removal of fuel subsidies and stagnant wages, nor have they offered empirical evidence regarding the impact of these economic pressures on teaching effectiveness, research productivity, and student mentorship in real-time. Furthermore, there exists a paucity of investigation into the coping mechanisms employed by academic personnel, including the pursuit of multiple occupations, and the subsequent effects of these strategies on institutional efficacy. Moreover, although existing studies recognise financial strain as a significant contributor to job dissatisfaction, there remains an insufficient exploration of how external economic policies—like the removal of subsidies—explicitly lead to diminished academic productivity, decreased instructional quality, and a reduction in research involvement. This research aims to address this deficiency by offering an in-depth examination of the relationship between economic instability and academic job performance, utilising contemporary data and practical experiences from higher education institutions in the Oyo metropolitan region.

Objective of the Study

The main objective of this study is to investigate the influence of fuel subsidy removal and poor remuneration on the job performance of academic staff of tertiary institution in Oyo metropolis.

The specific objectives are to:

1. investigate the influence of fuel subsidy removal on the job performance of academic staff of tertiary institutions in Oyo metropolis;

2. determine the influence of poor remuneration on the job performance of academic staff of tertiary institution in Oyo metropolis and

3. ascertain the composite influence of fuel subsidy and poor remuneration on the job performance of academic staff of tertiary institutions in Oyo metropolis.

Hypotheses

H₀1: There will be no significant influence of fuel subsidy removal on the job performance of academic staff of tertiary institution in Oyo metropolis.

H₀2: There will be no significant influence of poor remuneration on the job performance of academic staff of tertiary institution in Oyo metropolis.

H₀3: There will be no significant composite influence of fuel subsidy and poor remuneration on the job performance of academic staff of tertiary institutions in Oyo metropolis.

Scope of the Study

The main objective of this study is to investigate the influence of fuel subsidy removal and poor remuneration on the job performance of academic staff of tertiary institution in Oyo metropolis. The research was conducted at three (3) different tertiary institutions in Oyo metropolis

METHODOLOGY

Research Design

The study adopted a descriptive survey design because the researcher did not manipulate any of the variable of the study, instead examined the influence of independent variables (Fuel Subsidy removal and Poor Remuneration) on dependent variable (Job Performance of Academic Staff).

Population

The population of the study comprised entire academic staff of three pubic tertiary institutions in Oyo metropolis which includes Federal College of Education (Sp) Oyo, Emmanuel Alayande University of Education Oyo and Federal School of Survey Oyo. The total population of three tertiary institutions is one thousand and ten (1010) academic staff.

Sample and Sampling Technique

The participants in this study comprise 295 academic staff chosen from three tertiary institutions located in Oyo metropolis. The study employs a combination of Stratified Random Sampling and Proportional Allocation sampling techniques. Given that the study population comprises academic staff from three distinct institutions, it is fitting to categorise the population into strata (subgroups) according to their respective institutions. The sample was meticulously chosen to reflect the size of the academic staff at each institution, ensuring equitable representation across the board. This approach guarantees equitable representation and minimises sampling bias, thereby enhancing the precision of the results.

Research Instrument

Three self-developed instruments were created to measure fuel subsidy removal, poor remuneration, and job performance. Each of these instruments utilises a four-point Likert scale, including Strongly Agree, Agree, Disagree, and Strongly Disagree, to collect data for this study. The self-developed instruments designed to measure fuel subsidy removal (FSRQ) consist of ten question items. The poor remuneration questionnaire (PRQ) also comprises ten questions, while the job performance questionnaire (JPQ) includes ten questions as well.

Validity and Reliability of the Instrument

The research instrument was validated by the researchers and additional experts in the field of education. To ensure the instrument’s reliability, the items underwent a pilot study, during which the questions were administered to twenty academic staff members who were not part of the selected sample. The Cronbach’s alpha coefficient was utilised to assess reliability, yielding a value of 0.78.

Method of Data Collection

The researchers conducted a preliminary visit to the three selected tertiary institutions to get permission and foster cooperation from the institutional authorities and academic staff. The researchers collectively offer concise information and direction to the participants for completing the instrument items. The data collection period extended for six weeks to guarantee comprehensive coverage of the sampled academic staff.

Method of Data Analysis

This study employed both descriptive and inferential statistical approaches for data analysis derived from the sample. Descriptive statistics, including frequency count, percentage, mean, and standard deviation, were employed to address the research issue posed.

Inferential statistics, utilising the Pearson Product Moment Correlation and multiple regression analysis, were applied to data analysis at a 0.05 level of significance to evaluate the proposed hypotheses.

Analysis

Table 1: Pearson Correlation Table showing the influence of fuel subsidy removal on the job performance of academic staff of tertiary institution in Oyo metropolis.

Source: Field work 2024

Table 1 reveals that there is a significance influence of fuel subsidy removal on the job performance of academic staff of tertiary institution in Oyo metropolis (r= -.981, p<0.05). This implies that fuel subsidy removal has a great influence on the job performance of workers. Hence, the null hypothesis that there is no significant influence of fuel subsidy removal on the job performance of academic staff of tertiary institution in Oyo metropolis is therefore rejected.

Table 2: Pearson Correlation Table Showing the influence of Poor Remuneration on the job performance of academic staff of tertiary institution in Oyo metropolis.

Source: Field work 2024

Table 2 shows that there is a significance influence of poor remuneration on the job performance of academic staff of tertiary institution in Oyo metropolis (r = -.991, p<0.05). This implies that poor remuneration has a great influence on the job performance of workers. Hence, the null hypothesis that there is no significant influence of poor remuneration on the job performance of academic staff of tertiary institution in Oyo metropolis is therefore rejected.

H₀3: There will be no significant composite influence of fuel subsidy and poor remuneration on the job performance of academic staff of tertiary institutions in Oyo metropolis.

Table 3: Summary of Regression Analysis showing the composite influence of fuel subsidy and poor remuneration on the job performance of academic staff of tertiary institutions in Oyo metropolis.

Source: Field work 2024

Table 3 reveals that there is a significant composite influence of fuel subsidy and poor remuneration on the job performance of academic staff of tertiary institutions in Oyo metropolis F _{(2, 92)} = 8579.32,P< 0.05). The result yielded a coefficient multiple regression R of 0.992 and R square = 0.983 which implies that the two independent variables jointly accounted for 98.3% of the variation in job satisfaction. The remaining percentage could be explained with reference to extraneous variables that are not accounted for in this study. This implies that there is a significant composite influence of fuel subsidy and poor remuneration on the job performance of academic staff of tertiary institutions in Oyo metropolis. Hence, the null hypothesis is therefore rejected.

Table 4: Summary of Regression Analysis showing the relative contribution of fuel subsidy and poor remuneration on the job performance of academic staff of tertiary institutions in Oyo metropolis.

Source: Fieldwork 2024

Table 4 indicates that removal of fuel subsidy, poor renumeration, the unstandardized regression weight, the standardized error of estimate (SEß), the standardized coefficient beta (ß), the t-ratio and the level at which the t-ratio is significant. As indicated in the table, removal of fuel subsidy (ß= 0.189, t= 4.395, p=0.000) and poor renumeration(ß = 0.805, t = 18.747, p=0.000) significantly and relatively contributes to the job performance of academic staff of tertiary institutions in Oyo metropolis.

DISCUSSION OF FINDINGS

According to the findings from the first hypothesis The Pearson correlation study (r = -0.981, p < 0.05) indicates a robust negative link between the elimination of fuel subsidies and the job performance of academic personnel in tertiary institutions inside Oyo city. This indicates that the increase in fuel prices resulting from subsidy elimination places financial pressure on academic personnel, adversely affecting their motivation and productivity. This discovery corroborates Suraj’s (2018) assertion that economic uncertainty and escalating costs hinder professional development and research productivity. Suraj (2018) observed that as financial pressures escalate, academic personnel frequently undertake supplementary employment to enhance their income, hence diminishing their concentration on teaching and research. Likewise, Mohammed, Hashim, and Mansur (2018) discovered that escalating living expenses, especially from fuel price surges, lead to heightened absenteeism and deteriorating academic performance. The present investigation verifies that numerous academic personnel encounter difficulties in affording transit to their workplace, resulting in diminished class attendance and decreased research involvement.

The results of hypothesis two indicated a considerable negative association (r = -0.991, p < 0.05) between inadequate remuneration and job performance. This indicates that static salaries lead to a decrease in job satisfaction and overall performance. A considerable number of academic personnel indicate diminished morale, heightened financial strain, and decreased dedication to their teaching obligations. This outcome corroborates the findings of Ephrahem, Okendo, and Salema (2022), who found inadequate compensation as a significant factor contributing to low job commitment among teachers in Tanzania. Their research indicated that when incomes fail to align with the increasing cost of living, educators encounter demotivation, thus impacting their performance. Akambi and Akinwande (2019) similarly confirmed that numerous highly talented academic personnel depart public universities for more lucrative positions, resulting in elevated staff turnover and diminished institutional efficacy. The present study corroborates these findings, as numerous respondents expressed their intention to resign if superior financial prospects emerged.

The results of hypothesis three indicated that the regression analysis (F(2,92) = 8579.318, p < 0.05, R² = 0.983) demonstrates that the elimination of fuel subsidies and inadequate salary collectively explain 98.3% of the variance in job performance. The cumulative financial pressures from the elimination of subsidies and inadequate remuneration considerably impair the capacity of academic personnel to execute their responsibilities efficiently. This finding aligns with Ige (2019), who emphasised that financial limitations stemming from inadequate compensation and external economic disruptions undermine institutional efficacy. Ige discovered that escalating economic difficulties compel academic personnel to prioritise survival above professional development, hence diminishing their involvement with students and research endeavours. Usoro (2016) similarly observed that financial insecurity among academic personnel results in heightened absenteeism, less work commitment, and inferior teaching quality.

The regression coefficients demonstrate that inadequate compensation (β = 0.805, t = 18.747, p = 0.000) exerts a more significant adverse impact on job performance than the elimination of fuel subsidies (β = 0.189, t = 4.395, p = 0.000). Fuel price increases exacerbate financial strain; nonetheless, the principal concern for academic personnel is insufficient remuneration. This finding corroborates the research of Mohammed, Hashim, and Mansur (2018), which indicated that inadequate compensation structures are more influential in causing job discontent than economic shocks. Suraj (2018) observed that academic personnel facing insufficient remuneration are more inclined to pursue multiple employment opportunities, hence diminishing their efficacy in their principal responsibilities. The present study substantiates this by demonstrating that inadequate compensation compels numerous academic personnel to pursue supplementary revenue sources, consequently impacting their teaching and research obligations.

CONCLUSION

The research establishes that the elimination of fuel subsidies and inadequate compensation substantially affect the job performance of academic personnel in Oyo metropolis. The removal of fuel subsidies has a significant impact; however, inadequate compensation is the primary factor leading to diminished productivity, increased absenteeism, and lower job satisfaction. This corresponds with prior research highlighting the necessity for augmented pay and economic support systems to elevate job effectiveness in academics.

RECOMMENDATIONS

Based on the research findings it was recommended that:

1. The government should introduce targeted financial support (such as transport allowances) for academic staff to help cushion the impact of rising fuel costs.
2. The federal and state governments should review academic salary structures (e.g., the Consolidated University Academic Salary Structure – CONUASS) to reflect current economic realities.
3. Institutions should develop comprehensive welfare packages that cover housing, healthcare, and transportation subsidies.

REFERENCES

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