Subsidy is important and beneficial towards the vulnerable people if it were to be implemented in a sustainable and reasonable manner. According to the International Institute for Sustainable Developments (2010), “subsidies can be an important policy to promote social welfare and addressing the market failures”. Whereas according to the IEA, OPEC, OECD and the World Bank (2010), “the policy makers often justify energy subsidies with the argument that they contribute to economic growth, poverty reduction and security of supply”.
Energy price are not fix in nature and inflation may happen, this can put the poor households under severe financial stress. “Subsidies reform will help consolidate some public expenditure,” said Farouk Soussa (Gulf, 2015), City’s head of Middle Eastern economics. Although many fuel subsidies help the rich more than the poor, but with very effective, sustainable and well-designed subsidies, it will help lowering the burden of the vulnerable people more than the rich (Beaton at.al, 2010). We should not lose sight of the fact that some poor households, especially those in urban areas, who are very dependent on the subsidies. Therefore, subsidy reform were designed and implemented in a way to minimize the negative impacts for the poor households and making energy affordable. …show more content…
Subsidies can be vital in ensuring access to modern energy services including electricity. In addition, well-designed and targeted subsidies can also overcome environmental problems such as deforestation. However, energy subsidies can put societies onto ineffective spending. Fossil-fuel subsidies to consumers can create dependencies and discourage users from shifting to cleaner sources of
Energy price are not fix in nature and inflation may happen, this can put the poor households under severe financial stress. “Subsidies reform will help consolidate some public expenditure,” said Farouk Soussa (Gulf, 2015), City’s head of Middle Eastern economics. Although many fuel subsidies help the rich more than the poor, but with very effective, sustainable and well-designed subsidies, it will help lowering the burden of the vulnerable people more than the rich (Beaton at.al, 2010). We should not lose sight of the fact that some poor households, especially those in urban areas, who are very dependent on the subsidies. Therefore, subsidy reform were designed and implemented in a way to minimize the negative impacts for the poor households and making energy affordable. …show more content…
Subsidies can be vital in ensuring access to modern energy services including electricity. In addition, well-designed and targeted subsidies can also overcome environmental problems such as deforestation. However, energy subsidies can put societies onto ineffective spending. Fossil-fuel subsidies to consumers can create dependencies and discourage users from shifting to cleaner sources of