Comparative Analysis of the Effects of Fuel Subsidy Removals on the Nigerian Government Revenue: A Structuralist Computable General Equilibrium Model
No Thumbnail Available
Date
2019-12
Authors
Odior, E.S.O.
Journal Title
Journal ISSN
Volume Title
Publisher
Jos Journal of Economics
Abstract
This paper did a comparative study of the effects of 0, 20, 50 and 66.5% fuel subsidy removals on the Nigerian Government revenue. By 0, 20, 50 and 66.5% fuel subsidy removals, the premium motor spirit (PMS) will sell at ₦97.00, ₦111.43, ₦133.07 and ₦145.00 respectively. Methodologically, the study used a Structuralist Computable General-Equilibrium (SCGE) model to run simulations that indicate the nature of the effects over the period 2015 – 2020. The comparative empirical findings from the results reveal that 0, 20, 50 and 66.5% increases in the pump price of fuel in Nigeria have different effects on government income and government account balance. Specifically, the findings show that, both government income and government account balance witnessed positive effects. The study recommends that appropriate monetary, fiscal and exchange rate policy responses should be the basis for fuel subsidy removal and there is need to institute measures to reduce oil dependence and improve the non-oil sector considerably.
Description
Keywords
Comparative Analysis , Fuel Subsidy , Government Revenue , SCGE
Citation
Odior, E.S.O. (2019). Comparative Analysis of the Effects of Fuel Subsidy Removals on the Nigerian Government Revenue: A Structuralist Computable General Equilibrium Model. Jos Journal of Economics, Vol. 8, No. 3. 150 – 170.