Energy: Subsidies - an inefficient way to help the poor

A busy street in Indore, but there were riots in India when the government last cut fuel subsidies (photo: dpa)
A busy street in Indore, but there were riots in India when the government last cut fuel subsidies (photo: dpa)

It is often argued that energy subsidies aim to protect the poor from rising prices. But experts are increasingly calling for their reform after studies show that subsidies often bring few benefits to the people for whom they are intended. GIS expert Dr Carole Nakhle examines the case for and against energy subsidies in this special report and considers how easy is it for governments to remove them.

WHETHER the cost of fuel and electricity is high or low, there is a consensus that energy subsidies cause several problems.

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In many countries, subsidies are brought in specifically to distribute oil wealth or to help the poor. But subsi...

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