{"id":2712,"date":"2013-07-01T09:52:03","date_gmt":"2013-07-01T09:52:03","guid":{"rendered":"https:\/\/www.enaikoon.com\/?p=2712"},"modified":"2019-07-31T15:36:45","modified_gmt":"2019-07-31T15:36:45","slug":"the-effects-of-fuel-subsidy-removals-in-africa","status":"publish","type":"post","link":"https:\/\/www.enaikoon.com\/en\/the-effects-of-fuel-subsidy-removals-in-africa\/","title":{"rendered":"The effects of fuel subsidy removals in Africa"},"content":{"rendered":"Fuel subsidy removals in numerous African governments have raised debates\nand upheaval in the last few years. Sky-rocketing fuel prices are, as a result,\naffecting the lower and middle-class populations. Consumers are subject to\nhigher-priced fuel products used for cooking, heating, lighting, and\ntransportation.\n\n\"fuel_gauge\"<\/a>\n\nYet these cuts have been made for the benefit of the affected, as subsidies\nare often regressive. According to a recent study by the\nInternational Monetary Fund (IMF)<\/a>, fuel subsidies are both inefficient and\nbiased towards those who consume fuel the most. The study shows that the top\n20% of households benefit six times more from fuel subsidies than the bottom\n20%.\n\nIn order to counteract the rising living costs of the poor, some countries\nhave implemented compensation programs to support those most affected. Gabon\nand Mozambique have both offered conditional cash transfers to those most in\nneed. Ghana increased the number of public-transport buses. Namibia offers food\ndistribution programs for the poor. Nigeria created youth and women\u2019s\nemployment programs. Guinea lowered their health care costs. The IMF stresses\nthat these measures to protect the most vulnerable are essential to the\nreforms.\n\n\n\"Gaspump\"<\/a>\n\nZambia\u2019s president, Michael Sata, announced their fuel subsidy removal last\nmonth, stating that it will open up funds for job creation and the development\nof infrastructures, such as schools, universities, and hospitals.\n\nGhana has completely removed their subsidy on petrol, gas oil, and LPG\n(liquefied petroleum gas) in hopes to help restore their fiscal stability after\na huge 2012 budget deficit. The consequence is higher fuel prices; Ghanaians\nwill see an immediate 3 percent increase in petrol and LPG, and a 2 percent\nincrease in diesel fuel.\n\nMost recently, Egypt has launched their first phase of plans to cut their\nfuel subsidy. Since their economy took a downturn after political turmoil in\n2011, they are taking measures to secure a loan of $4.8 billion from the IMF,\nwhich is only possible with a reform to their energy subsidies. Phase one is to\ndistribute petrol from depots to gas stations using smart cards. The Egyptian\nGeneral Petroleum Company (EGPC) hopes this will reduce fuel theft as subsidies\nwill only be applied at the retail stage; fewer opportunities will be left for\nsmugglers who siphon off one fifth of subsidised fuel to sell at profit.\n\nWith increasing energy costs, Africans affected by these subsidies must\nsearch for methods to reduce fuel consumption. The appropriate support from\ngovernment and decrease in fuel theft will hopefully lead to more stable\neconomies across the continent.","protected":false},"excerpt":{"rendered":"

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