IDEAS home Printed from https://ideas.repec.org/p/ags/iaae18/275938.html
   My bibliography  Save this paper

Implication of Switching Fuel Subsidy on Households Welfare in Nigeria

Author

Abstract

A critical view of how the various fuel pricing policies directed towards addressing the challenges of the fiscal stability of Nigerian economy will translate to improved social welfare is farfetched. This study used a static computable general equilibrium model to assess the impact of phased and withdrawal of PMS consumption subsidy as well as their alternative curtailing policies on the welfare of farm and non-farm households in Nigeria. Results showed that partial and total PMS subsidy reform with the subsidy gains conserved reduced households consumption level, increased their expenditures on all commodities and reduced social welfare by a worst ₦70.47 billion and lowest ₦40.80billion. However, an alternative policy of reallocating fuel subsidy into the crop and service sectors contributed largely to increased household consumption basket and utility increased as low as 0.11% on phased PMS subsidy reform measure among urban non-agriculture and as high as 0.35% among rural agricultural households on account of subsidy withdrawal measure. Thus, social welfare increased from a minimum gain of about ₦43.42 billion on the alternative policy to phased PMS subsidy reform and a maximum gain of about ₦67.90billion on the alternative policy to PMS subsidy withdrawal.

Suggested Citation

  • Agboje, A., 2018. "Implication of Switching Fuel Subsidy on Households Welfare in Nigeria," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275938, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae18:275938
    DOI: 10.22004/ag.econ.275938
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/275938/files/2421.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.275938?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Durand-Lasserve, Olivier & Campagnolo, Lorenza & Chateau, Jean & Dellink, Rob, 2015. "Modelling of Distributional Impacts of Energy Subsidy Reforms: an Illustration with Indonesia," Climate Change and Sustainable Development 206853, Fondazione Eni Enrico Mattei (FEEM).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jon Sampedro & Iñaki Arto & Mikel González-Eguino, 2017. "Implications of Switching Fossil Fuel Subsidies to Solar: A Case Study for the European Union," Sustainability, MDPI, vol. 10(1), pages 1-12, December.
    2. Filippo Maria D’Arcangelo & Ilai Levin & Alessia Pagani & Mauro Pisu & Åsa Johansson, 2022. "A framework to decarbonise the economy," OECD Economic Policy Papers 31, OECD Publishing.
    3. Stefan Bakker & Gary Haq & Karl Peet & Sudhir Gota & Nikola Medimorec & Alice Yiu & Gail Jennings & John Rogers, 2019. "Low-Carbon Quick Wins: Integrating Short-Term Sustainable Transport Options in Climate Policy in Low-Income Countries," Sustainability, MDPI, vol. 11(16), pages 1-17, August.
    4. Maulidia, Martha & Dargusch, Paul & Ashworth, Peta & Ardiansyah, Fitrian, 2019. "Rethinking renewable energy targets and electricity sector reform in Indonesia: A private sector perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 101(C), pages 231-247.
    5. Immervoll, Herwig & Linden, Jules & O'Donoghue, Cathal & Sologon, Denisa Maria, 2023. "Who Pays for Higher Carbon Prices? Illustration for Lithuania and a Research Agenda," IZA Discussion Papers 15868, Institute of Labor Economics (IZA).
    6. Robert J. R. Elliott & Toshihiro Okubo, 2016. "Ecological Modernization in Japan: The Role of Interest Rate Subsidies and Voluntary Pollution Control Agreements," Asian Economic Papers, MIT Press, vol. 15(3), pages 66-88, Fall.
    7. Rentschler, Jun & Kornejew, Martin & Bazilian, Morgan, 2017. "Fossil fuel subsidy reforms and their impacts on firms," Energy Policy, Elsevier, vol. 108(C), pages 617-623.
    8. Ben Westmore, 2017. "Sharing the Benefits of China’s Growth by Providing Opportunities to All," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(03), pages 1-33, October.
    9. Jun E Rentschler & Nobuhiro Hosoe, 2017. "Illicit dealings: Fossil fuel subsidy reforms and the role of tax evasion and smuggling," GRIPS Discussion Papers 17-05, National Graduate Institute for Policy Studies.
    10. Roman Mendelevitch, 2018. "Testing supply-side climate policies for the global steam coal market—can they curb coal consumption?," Climatic Change, Springer, vol. 150(1), pages 57-72, September.
    11. van Ruijven, Bas J. & O’Neill, Brian C. & Chateau, Jean, 2015. "Methods for including income distribution in global CGE models for long-term climate change research," Energy Economics, Elsevier, vol. 51(C), pages 530-543.
    12. Lekavičius, V. & Bobinaitė, V. & Galinis, A. & Pažėraitė, A., 2020. "Distributional impacts of investment subsidies for residential energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 130(C).
    13. Rentschler, Jun & Kornejew, Martin, 2017. "Energy price variation and competitiveness: Firm level evidence from Indonesia," Energy Economics, Elsevier, vol. 67(C), pages 242-254.
    14. Maruyama Rentschler,Jun Erik & Hosoe,Nobuhiro, 2022. "Illicit Schemes : Fossil Fuel Subsidy Reforms and the Role of Tax Evasion and Smuggling," Policy Research Working Paper Series 9907, The World Bank.
    15. José M. Labeaga & Xavier Labandeira & Xiral López-Otero, 2018. "Energy Tax Reform and Poverty Alleviation in Mexico," Working Papers 1801, Universidade de Vigo, Departamento de Economía Aplicada.

    More about this item

    Keywords

    Environmental Economics and Policy; International Development;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae18:275938. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.