Who Benefit Most from Fuel Subsidies? Evidence from Nigeria

Energy Policy 87 (2015) 314–324

11 Pages Posted: 10 Oct 2015

See all articles by Ismail Soile

Ismail Soile

University of Lagos; University of Dundee - Centre for Energy, Petroleum and Mineral Law & Policy (CEPMLP)

Xiaoyi Mu

Center for Energy, Petroleum and Mineral Law and Policy, University of Dundee

Date Written: October 8, 2015

Abstract

The paper studies the benefit incidence of fuel subsidies in Nigeria household sector. Combining annual subsidy estimates with the households’ expenditure data from the 2009/10 Harmonized Living Standard Survey, we investigate how the benefits from fuel subsidies are accrued to each income groups in Nigeria. The results show that while the kerosene subsidy is more evenly distributed across income groups, petrol subsidy is concentrated to high income groups. In aggregate, the top 20% households enjoy twice as much the benefit of fuel subsidies as the bottom 20% households. We also examine the concentration and progressivity of fuel subsidies using Gini coefficient measures and Lorenz concentration curves and find both fuel subsidies are more regressive than the per capita expenditure.

Keywords: benefit incidence analysis, Gini-coefficient, concentration curve, fuel subsidy

JEL Classification: Q4, D63

Suggested Citation

Soile, Ismail and Mu, Xiaoyi, Who Benefit Most from Fuel Subsidies? Evidence from Nigeria (October 8, 2015). Energy Policy 87 (2015) 314–324. Available at SSRN: https://ssrn.com/abstract=2671338

Ismail Soile (Contact Author)

University of Lagos ( email )

Akoka
PMB 4491
Akoka, Lagos State 00234
Nigeria
+2348076184184 (Phone)

University of Dundee - Centre for Energy, Petroleum and Mineral Law & Policy (CEPMLP) ( email )

Nethergate
Dundee, Scotland DD1 4HN
United Kingdom

Xiaoyi Mu

Center for Energy, Petroleum and Mineral Law and Policy, University of Dundee ( email )

University of Dundee
Dundee, Scotland DD1 4HN
United Kingdom

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