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

Abstract

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.

Sustainable energy development in Nigeria: Current status and policy options

“…This would aid the reduction of corrupt practices experienced in the petroleum sector and stimulate consumers to use their energy commodities more efficiently. Although a study carried out by Soile et al [34] argue that the removal of fuel subsidy may have a negative impact on the economy, another study carried out by Siddig et al [35] showed that the gradual reduction of the subsidy will increase the country's Gross Domestic Product (GDP) but will have a detrimental impact on household income (poor households in particular). The solutions will be to accompany the subsidy reduction with income transfers aimed at poor households or domestic production of petroleum products to alleviate the negative impacts on household income [36,37].…”

“…Policy options for a sustainable transport system include the stimulation of public transportation through the introduction of an intermodal passenger and freight transport system that will better integrate and improve the lives of Nigerians. A specific example is the Seoul Metro System in Seoul, 34 South Korea, as shown in Fig. 21.…”

“…Develop a programme which will systematically assess current and emerging technologies in coal power Low Invest in a detailed geological assessment of on-shore and off-shore carbon storage locations Low/ Medium Set-up emission control standards and provide incentives to investors who install pollution control Mandate the use of efficient fuel wood stoves High Encourage the use of energy efficient lighting bulbs Medium Ensure the importation of energy efficient vehicles, appliances and machinery Low Import electric transformers that are durable when overloaded Low Develop and implement an Equipment Power Labelling programme Medium Adopt a tariff structure which will promote demand and supply side energy management Low Embark on studies that deals with demand and supply side energy management to reduce power losses Medium Incorporate Demand-Side Bidding and energy planning High Develop and implement a National Appliance Efficiency Standards law High Improve efficiency of passenger transport system Medium Educate the public on the benefits of energy efficiency Medium 34 The Seoul Metropolitan Subway is known as the world's longest multioperator metro system by route length, and consists of 18 lines that serve the Seoul Metropolitan Area. The subway system is packed with advanced technology such as 4G LTE, WiFi, DMB, and WiBro services.…”

The Impact of Energy De-Subsidization Policy in 2030: A Dynamic CGE Model in China

“…Today's portfolio of fossil energy production and increasing energy consumption go against a sustainable vision for the world's development [1]. Energy subsidy, though initially designed to alleviate energy poverty [2] and lower the costs of domestic production [3], has caused an excessive energy consumption inescapably, which has led to social conflicts, environmental pollution, and even corruption [4]. On the other hand, inefficient energy subsidies could have negative effects on economic growth and social welfare [5][6][7], and may lead to untargeted and a non-transparent energy market [8][9][10][11] and heavy financial burden issues [12][13][14].…”

Actors, Frames and Contexts in Fossil Fuel Subsidy Reform

“…This is particularly powerful when there is little public confidence in the government's ability to transfer savings from subsidy removal to other social programmes. Lower energy prices contribute to lower transport and food prices (Soile et al 2014). Energy subsidies, according to this frame, allow citizens to their entitlementi.e.…”