Impacts on Poverty of Removing Fuel Import Subsidies in Nigeria

The petroleum sector contributes substantially to the Nigerian economy; however, the potential benefits are diminished because of the existence of significant subsidies on imports of petroleum products. Subsidies on imported petroleum products are...

Full description

Bibliographic Details
Main Authors:	Siddig, Khalid, Minor, Peter, Grethe, Harald, Aguiar, Angel, Walmsley, Terrie
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	PROFIT MAXIMIZATION EMPLOYMENT FUEL SUBSIDIES CANE GOVERNMENT EXPENDITURES ANIMAL PRODUCTS PRICE OF FUEL PRODUCTION PRICE INCREASES BARRIER INCOME ENERGY PRICING PERFECT COMPETITION VEHICLES ACTIVITIES REAL GDP EXCHANGE GOOD GOVERNANCE EXPORTS DEVELOPING COUNTRIES WOOD PRODUCTS ELASTICITY POLITICAL ECONOMY REGULATORY AGENCY WELFARE VARIABLES DOMESTIC PRICE GAS BARRELS PER DAY SUBSIDY PRICE TAX REAL INCOME INPUTS SOCIAL COST RETURNS TO SCALE PAYMENTS AIR TRANSACTION COST DEVELOPMENT OILS TRADE BALANCE PETROLEUM SAVINGS ROAD PETROLEUM PRODUCTION COSTS OIL TELECOMMUNICATIONS ROAD SECTOR TRANSPORT KEROSENE SUBSIDIES CONSTANT RETURNS TO SCALE DEMAND FOR PETROLEUM PRODUCTS WATER EXTERNALITIES FAILURES INCREASING RETURNS DEBT SUGAR CANE TRANSPORT EQUIPMENT PRICE SUBSIDIES UTILITY NATURAL RESOURCES GROSS DOMESTIC PRODUCT NOMINAL INCOME FUEL CONSUMPTION FUELS SUBSIDIES ECONOMIC RESEARCH INFRASTRUCTURE TAXES PRICE CHANGE AUTOMOBILES INVESTORS CONSUMPTION TRANSPORTATION WAGES POLICIES TRUCKS BALANCE MARKET PRICES VALUE TRADING PATTERNS POWER ELECTRICITY OIL REFINING CAPACITY DEMAND FOSSIL FUEL PRICE CHANGES ECONOMY AGRICULTURE CONSUMERS INCOMES MOTOR VEHICLES ECONOMIC EFFICIENCY IMPORTS OF PETROLEUM FUEL PRICES OIL REFINING SHARES ENERGY USE ECONOMIC THEORY ENERGY PRICES PETROLEUM SECTOR COST OF TRANSPORTATION ENERGY EFFICIENCY GOVERNANCE TRADE NATURAL GAS VOLATILE ENERGY AIR TRANSPORT GDP GOODS THEORY INVESTMENT FUEL PRICE SHARE COAL FUEL CRUDE OIL SEA TRANSPORT INVESTMENTS COSTS OF TRANSPORT DOMESTIC PETROLEUM CONSUMPTION OF PETROLEUM PETROLEUM PRODUCTS KEROSENE COMMODITY FOSSIL POSITIVE EFFECTS FUEL COST PRODUCERS OF PETROLEUM PRICES APPROACH PRODUCTION COSTS ENERGY DEVELOPMENT POLICY COMPETITION
Online Access:	http://documents.worldbank.org/curated/en/2015/07/24823659/impacts-poverty-removing-fuel-import-subsidies-nigeria http://hdl.handle.net/10986/22460

id	okr-10986-22460
recordtype	oai_dc
spelling	okr-10986-224602021-04-23T14:04:08Z Impacts on Poverty of Removing Fuel Import Subsidies in Nigeria Siddig, Khalid Minor, Peter Grethe, Harald Aguiar, Angel Walmsley, Terrie PROFIT MAXIMIZATION EMPLOYMENT FUEL SUBSIDIES CANE GOVERNMENT EXPENDITURES ANIMAL PRODUCTS PRICE OF FUEL PRODUCTION PRICE INCREASES BARRIER INCOME ENERGY PRICING PERFECT COMPETITION VEHICLES ACTIVITIES REAL GDP EXCHANGE GOOD GOVERNANCE EXPORTS DEVELOPING COUNTRIES WOOD PRODUCTS ELASTICITY POLITICAL ECONOMY REGULATORY AGENCY WELFARE VARIABLES DOMESTIC PRICE GAS BARRELS PER DAY SUBSIDY PRICE TAX REAL INCOME INPUTS SOCIAL COST RETURNS TO SCALE PAYMENTS AIR TRANSACTION COST DEVELOPMENT OILS TRADE BALANCE PETROLEUM SAVINGS ROAD PETROLEUM PRODUCTION COSTS OIL TELECOMMUNICATIONS ROAD SECTOR TRANSPORT KEROSENE SUBSIDIES CONSTANT RETURNS TO SCALE DEMAND FOR PETROLEUM PRODUCTS WATER EXTERNALITIES FAILURES INCREASING RETURNS DEBT SUGAR CANE TRANSPORT EQUIPMENT PRICE SUBSIDIES UTILITY NATURAL RESOURCES GROSS DOMESTIC PRODUCT NOMINAL INCOME FUEL CONSUMPTION FUELS SUBSIDIES ECONOMIC RESEARCH INFRASTRUCTURE TAXES PRICE CHANGE AUTOMOBILES INVESTORS CONSUMPTION TRANSPORTATION WAGES POLICIES TRUCKS BALANCE MARKET PRICES VALUE TRADING PATTERNS POWER ELECTRICITY OIL REFINING CAPACITY DEMAND FOSSIL FUEL PRICE CHANGES ECONOMY AGRICULTURE CONSUMERS INCOMES MOTOR VEHICLES ECONOMIC EFFICIENCY IMPORTS OF PETROLEUM FUEL PRICES OIL REFINING SHARES ENERGY USE ECONOMIC THEORY ENERGY PRICES PETROLEUM SECTOR COST OF TRANSPORTATION ENERGY EFFICIENCY GOVERNANCE TRADE NATURAL GAS VOLATILE ENERGY AIR TRANSPORT GDP GOODS THEORY INVESTMENT FUEL PRICE SHARE COAL FUEL CRUDE OIL SEA TRANSPORT INVESTMENTS COSTS OF TRANSPORT DOMESTIC PETROLEUM CONSUMPTION OF PETROLEUM PETROLEUM PRODUCTS KEROSENE COMMODITY FOSSIL POSITIVE EFFECTS FUEL COST PRODUCERS OF PETROLEUM PRICES APPROACH PRODUCTION COSTS ENERGY DEVELOPMENT POLICY COMPETITION The petroleum sector contributes substantially to the Nigerian economy; however, the potential benefits are diminished because of the existence of significant subsidies on imports of petroleum products. Subsidies on imported petroleum products are considered to be an important instrument for keeping fuel prices, and hence the cost of living, low. The costs of these subsidies, however, have risen dramatically in recent years along with increased volatility in world petroleum and petroleum product prices and increased illegal exportation of subsidized petroleum products into neighboring countries. Removing the subsidy on fuel is one of the most contentious socioeconomic policy issues in Nigeria today. In this paper, an economy-wide framework is used to identify the impact of removing the fuel subsidy on the Nigerian economy and investigate how alternative policies might be used to meet socioeconomic objectives related to fuel subsidies. The results show that although a reduction in the subsidy generally results in an increase in Nigeria’s gross domestic product, it can have a detrimental impact on household income, and in particular on poor households. Accompanying the subsidy reduction with income transfers aimed at poor households or domestic production of petroleum products can alleviate the negative impacts on household income. 2015-08-17T19:46:46Z 2015-08-17T19:46:46Z 2015-07 Working Paper http://documents.worldbank.org/curated/en/2015/07/24823659/impacts-poverty-removing-fuel-import-subsidies-nigeria http://hdl.handle.net/10986/22460 English en_US Policy Research Working Paper;No. 7376 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Nigeria
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	PROFIT MAXIMIZATION EMPLOYMENT FUEL SUBSIDIES CANE GOVERNMENT EXPENDITURES ANIMAL PRODUCTS PRICE OF FUEL PRODUCTION PRICE INCREASES BARRIER INCOME ENERGY PRICING PERFECT COMPETITION VEHICLES ACTIVITIES REAL GDP EXCHANGE GOOD GOVERNANCE EXPORTS DEVELOPING COUNTRIES WOOD PRODUCTS ELASTICITY POLITICAL ECONOMY REGULATORY AGENCY WELFARE VARIABLES DOMESTIC PRICE GAS BARRELS PER DAY SUBSIDY PRICE TAX REAL INCOME INPUTS SOCIAL COST RETURNS TO SCALE PAYMENTS AIR TRANSACTION COST DEVELOPMENT OILS TRADE BALANCE PETROLEUM SAVINGS ROAD PETROLEUM PRODUCTION COSTS OIL TELECOMMUNICATIONS ROAD SECTOR TRANSPORT KEROSENE SUBSIDIES CONSTANT RETURNS TO SCALE DEMAND FOR PETROLEUM PRODUCTS WATER EXTERNALITIES FAILURES INCREASING RETURNS DEBT SUGAR CANE TRANSPORT EQUIPMENT PRICE SUBSIDIES UTILITY NATURAL RESOURCES GROSS DOMESTIC PRODUCT NOMINAL INCOME FUEL CONSUMPTION FUELS SUBSIDIES ECONOMIC RESEARCH INFRASTRUCTURE TAXES PRICE CHANGE AUTOMOBILES INVESTORS CONSUMPTION TRANSPORTATION WAGES POLICIES TRUCKS BALANCE MARKET PRICES VALUE TRADING PATTERNS POWER ELECTRICITY OIL REFINING CAPACITY DEMAND FOSSIL FUEL PRICE CHANGES ECONOMY AGRICULTURE CONSUMERS INCOMES MOTOR VEHICLES ECONOMIC EFFICIENCY IMPORTS OF PETROLEUM FUEL PRICES OIL REFINING SHARES ENERGY USE ECONOMIC THEORY ENERGY PRICES PETROLEUM SECTOR COST OF TRANSPORTATION ENERGY EFFICIENCY GOVERNANCE TRADE NATURAL GAS VOLATILE ENERGY AIR TRANSPORT GDP GOODS THEORY INVESTMENT FUEL PRICE SHARE COAL FUEL CRUDE OIL SEA TRANSPORT INVESTMENTS COSTS OF TRANSPORT DOMESTIC PETROLEUM CONSUMPTION OF PETROLEUM PETROLEUM PRODUCTS KEROSENE COMMODITY FOSSIL POSITIVE EFFECTS FUEL COST PRODUCERS OF PETROLEUM PRICES APPROACH PRODUCTION COSTS ENERGY DEVELOPMENT POLICY COMPETITION
spellingShingle	PROFIT MAXIMIZATION EMPLOYMENT FUEL SUBSIDIES CANE GOVERNMENT EXPENDITURES ANIMAL PRODUCTS PRICE OF FUEL PRODUCTION PRICE INCREASES BARRIER INCOME ENERGY PRICING PERFECT COMPETITION VEHICLES ACTIVITIES REAL GDP EXCHANGE GOOD GOVERNANCE EXPORTS DEVELOPING COUNTRIES WOOD PRODUCTS ELASTICITY POLITICAL ECONOMY REGULATORY AGENCY WELFARE VARIABLES DOMESTIC PRICE GAS BARRELS PER DAY SUBSIDY PRICE TAX REAL INCOME INPUTS SOCIAL COST RETURNS TO SCALE PAYMENTS AIR TRANSACTION COST DEVELOPMENT OILS TRADE BALANCE PETROLEUM SAVINGS ROAD PETROLEUM PRODUCTION COSTS OIL TELECOMMUNICATIONS ROAD SECTOR TRANSPORT KEROSENE SUBSIDIES CONSTANT RETURNS TO SCALE DEMAND FOR PETROLEUM PRODUCTS WATER EXTERNALITIES FAILURES INCREASING RETURNS DEBT SUGAR CANE TRANSPORT EQUIPMENT PRICE SUBSIDIES UTILITY NATURAL RESOURCES GROSS DOMESTIC PRODUCT NOMINAL INCOME FUEL CONSUMPTION FUELS SUBSIDIES ECONOMIC RESEARCH INFRASTRUCTURE TAXES PRICE CHANGE AUTOMOBILES INVESTORS CONSUMPTION TRANSPORTATION WAGES POLICIES TRUCKS BALANCE MARKET PRICES VALUE TRADING PATTERNS POWER ELECTRICITY OIL REFINING CAPACITY DEMAND FOSSIL FUEL PRICE CHANGES ECONOMY AGRICULTURE CONSUMERS INCOMES MOTOR VEHICLES ECONOMIC EFFICIENCY IMPORTS OF PETROLEUM FUEL PRICES OIL REFINING SHARES ENERGY USE ECONOMIC THEORY ENERGY PRICES PETROLEUM SECTOR COST OF TRANSPORTATION ENERGY EFFICIENCY GOVERNANCE TRADE NATURAL GAS VOLATILE ENERGY AIR TRANSPORT GDP GOODS THEORY INVESTMENT FUEL PRICE SHARE COAL FUEL CRUDE OIL SEA TRANSPORT INVESTMENTS COSTS OF TRANSPORT DOMESTIC PETROLEUM CONSUMPTION OF PETROLEUM PETROLEUM PRODUCTS KEROSENE COMMODITY FOSSIL POSITIVE EFFECTS FUEL COST PRODUCERS OF PETROLEUM PRICES APPROACH PRODUCTION COSTS ENERGY DEVELOPMENT POLICY COMPETITION Siddig, Khalid Minor, Peter Grethe, Harald Aguiar, Angel Walmsley, Terrie Impacts on Poverty of Removing Fuel Import Subsidies in Nigeria
geographic_facet	Africa Nigeria
relation	Policy Research Working Paper;No. 7376
description	The petroleum sector contributes substantially to the Nigerian economy; however, the potential benefits are diminished because of the existence of significant subsidies on imports of petroleum products. Subsidies on imported petroleum products are considered to be an important instrument for keeping fuel prices, and hence the cost of living, low. The costs of these subsidies, however, have risen dramatically in recent years along with increased volatility in world petroleum and petroleum product prices and increased illegal exportation of subsidized petroleum products into neighboring countries. Removing the subsidy on fuel is one of the most contentious socioeconomic policy issues in Nigeria today. In this paper, an economy-wide framework is used to identify the impact of removing the fuel subsidy on the Nigerian economy and investigate how alternative policies might be used to meet socioeconomic objectives related to fuel subsidies. The results show that although a reduction in the subsidy generally results in an increase in Nigeria’s gross domestic product, it can have a detrimental impact on household income, and in particular on poor households. Accompanying the subsidy reduction with income transfers aimed at poor households or domestic production of petroleum products can alleviate the negative impacts on household income.
format	Working Paper
author	Siddig, Khalid Minor, Peter Grethe, Harald Aguiar, Angel Walmsley, Terrie
author_facet	Siddig, Khalid Minor, Peter Grethe, Harald Aguiar, Angel Walmsley, Terrie
author_sort	Siddig, Khalid
title	Impacts on Poverty of Removing Fuel Import Subsidies in Nigeria
title_short	Impacts on Poverty of Removing Fuel Import Subsidies in Nigeria
title_full	Impacts on Poverty of Removing Fuel Import Subsidies in Nigeria
title_fullStr	Impacts on Poverty of Removing Fuel Import Subsidies in Nigeria
title_full_unstemmed	Impacts on Poverty of Removing Fuel Import Subsidies in Nigeria
title_sort	impacts on poverty of removing fuel import subsidies in nigeria
publisher	World Bank, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2015/07/24823659/impacts-poverty-removing-fuel-import-subsidies-nigeria http://hdl.handle.net/10986/22460
_version_	1764451136953122816

Impacts on Poverty of Removing Fuel Import Subsidies in Nigeria

Similar Items