Fuel subsidy in Nigeria: Fact or fallacy

Nwachukwu, Maxwell Umunna; Chike, Harold

doi:10.1016/j.energy.2011.02.020

Cited by 33 publications

(16 citation statements)

References 6 publications

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“…Government attempts to do this primarily by regulating energy prices so as to absorb the shock of rises in international oil prices for households. In Nigeria and most oil-producing countries, the energy sector is regulated by government through controls over pricing, supply and investment (Nwachukwu and Chike, 2011). The abundance of energy resources in oil-producing countries makes government introduce energy subsidies as a means for redistribution of wealth.…”

Section: Introductionmentioning

confidence: 99%

Fuel Subsidy Reform and Environmental Quality in Nigeria

et al. 2014

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Section: Introductionmentioning

confidence: 99%

Fuel Subsidy Reform and Environmental Quality in Nigeria

et al. 2014

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“…the amount of subsidy for each unit of fuel. The study shows that increase in the amount of subsidy increases the demand of fuel (Nwachukwu and Chike, 2011). The result suggests that the effect of subsidy significantly affect the behavior of the consumers.…”

Section: Empirical Study Regarding This Issue Attempted To Analyze Thmentioning

confidence: 72%

A Growing Pain: An Experimental Approach to Discover the Most Acceptable Strategy for Lifting Fuel Subsidy Scheme in Indonesia

Pradiptyo

Sahadewo

2012

SSRN Journal

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Fuel subsidy has been the biggest quandaries in Indonesian economy, as it has been creating a huge opportunity costs to the economy. The subsidy is implemented to a consumer good (i.e. fuels) as oppose to targeted recipients, creating distortion in the efficient resource allocation. It was estimated about 70% of the subsidy were received by 40% of top income households (World Bank, 2007). Although the budget plan for the subsidy in 2011 was Rp129.7 trillion or 10% of the GoI annual budget, the actual subsidy was Rp160.7 trillion (13.3% of the GoI annual budget).Indeed, no individual prefers to lose the subsidy that has been received for many years, however the Government of Indonesia (GoI) cannot maintain the subsidy policy on fuel price any longer without creating extra budgetary burden. This study use experimental approach to seek the most acceptable exit strategy of eliminating fuel subsidy scheme in Indonesia based on households' perspective. 335 subjects participated in the experiment, ranging from those who do not own motor vehicle, those who have motor cycle(s) and those who have car(s). During the experiment, subjects were given several pair-wise choices and chose the most acceptable policy from each pair-wise policy choices. The results show that the combination of gradual elimination and earmarked reallocation scheme were the most desirable. Subject with very low and low-income background tend to be more receptive for sudden elimination of the subsidy in comparison to their counterpart from medium and high-income backgrounds.

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“…Fuel subsidy is particularly popular in oil producing countries like Iran, Venezuela, China, Saudi Arabia, India, Indonesia, Egypt and Ukraine, (Nwachukwu and Chike, 2011). Fuel subsidy removal programs are sensitive to economic structure, level of development of the country, political systems and the state of the economy.…”

Section: The Concept Of Subsidymentioning

confidence: 99%

The Impact of Gasoline Subsidy Removal on the Transportation Sector in Nigeria

Soile¹,

Tsaku²,

Yar'Adua³

2014

AJER

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Nigeria, like other oil exporting countries in the world has embarked on the policy of gradual removal of fuel subsidies since 1970s. However, this issue has become highly contentious in recent time due to the incessant nature and the effects on the economy. To this end the paper examine the impact of subsidy removal on transport sector development in Nigeria using the co-integration and error-correction models. The result showed that subsidy had a positive and significant relationship with transport sector which implies that removing gasoline subsidies can increase the operational cost of transportation sector and reduce the gross domestic product (GDP) of the country.

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Fuel subsidy in Nigeria: Fact or fallacy

Cited by 33 publications

References 6 publications

Fuel Subsidy Reform and Environmental Quality in Nigeria

Fuel Subsidy Reform and Environmental Quality in Nigeria

A Growing Pain: An Experimental Approach to Discover the Most Acceptable Strategy for Lifting Fuel Subsidy Scheme in Indonesia

The Impact of Gasoline Subsidy Removal on the Transportation Sector in Nigeria

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