Impact of Subsidy Removal on Nigerian Economy

IMPACT OF FUEL SUBSIDY REMOVAL ON Nigerian ECONOMY By AKINDELE OLUSOLA AKINOLA NOVEMBER, 2O11 INTRODUCTION The regulation and hold back of essential prices of petroleum products by administration is peculiar in ontogenesis nations of the world. Governments, in some brasss tension their efforts on the direct control of import levels, internal distri yetion, and domestic prices while some acquaint the hidden sector the depute to freely import and scatter petroleum products. However, the government sets the domestic price ceilings and compensate the private sector distributors to cover import losses. Governments that directly control prices in most cases introduce price subsidies that keep domestic prices below b set up prices. This is extraly the case when transnational fuel prices increase sharply and governments be averse to carry on these increases fully on to the domestic prices of petroleum products. nada subsidies are found in virtually every a cres but its size varies; some are relatively juicy while some are low compared to that of otherwise countries. The justifications for the usance of subsidy vary from social welfare protection, blood variant creation, the encouragement of new sources of strength supply, and economic development to force security. However, large energy subsidies in countries also compete for particular resources that could otherwise be used to deliver other natural services for the developmental projects in the economy. Removing fuel subsidies is considered by many a(prenominal) to be a win-win policy measure that would benefit twain the global economy and the environment and therefore a no regret option for climate-change mitigation (Burniaux et al., 2009). In theory, eliminating fuel subsidies would pull up stakes in higher fuel prices in countries that currently subsidize consumer prices, which would reduce consumption. At the same time, removing subsidies would remove a dear(p) debilitate on the government budget. Consequ! ently, eliminating subsidies on fuel whitethorn be one...If you want to get a full essay, order it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay