The government has just removed fuel subsidies. It means that the price of basic goods will surely go up.

It’s sometimes useful to think of a sentence as having a theme (in this case ‘The government’) and a rheme (‘has just removed fuel subsidies’).

When you want to refer back to the theme, use a pronoun:

• The government has just removed fuel subsidies. They felt that the fuel subsidies were not economically sustainable.

When you want to refer back to the rheme, use ‘this’ or ‘these’:

• The government has just removed fuel subsidies. This means that the price of basic goods will surely go up.

Choosing the right referencing word (‘it’ or ‘this’) will make your writing more coherent (easier to understand). If you are preparing for IELTS, the right choice of referencing word will give you a higher score for coherence and cohesion (see IELTS public band descriptors).