Topic: The gloomy light called subsidy. (Read 678 times)

I'm sure it depends on each country and how the government handles the system of giving subsidies to the people, but this aspect can either be really good or cause bad effects on the general public. In my country, it has two contrasting effects. First, the positive one, is the people are able to use subsidies to allow them to have a better lifestyle (support for education, business, food, and daily needs). The negative one, on the other hand, pushes people to either be too reliant on these subsidies that they do not even work anymore or use the money for negative things (gambling, buying drugs).

Agreed, most of the politicians and the rich won't suffer any difficulty out of this. So, without proper understanding about the common man's life they just lift the subsidy provided to the suffering people. This shouldn't be done and surely those funds could've been redirected for something else that's unnecessary.

Really these subsidies play a major role in common people's life. In my region fishing is done and for the same fishermen were provided with subsidy on fuel for the boat, at times it looks like whats the need for subsidy. In reality the income varies depending on the season and by those days this used to be a big favour.

This is my point exactly. These people are only making matters worst for the citizens of their country. They won't put the money saved to good use. Instead, they just mismanaged these funds even further. The excuse that they can no longer pay for subsidies is trash. They are just looking for excuses to stop paying.

What's the point of stopping subsidies if everything in the country would become so expensive and increase inflation even further? Most of these politicians don't suffer the policies they make so they go about making any kind of policies they want.

Truly Removal of the fuel subsidy I don't think it is a problem because, in a system where the government is working fine, Subsidy removal will enable the market forces to determine the price of petroleum in a competitive market, but rather the problem is the government's removal of fuel subsidy without keeping things in place to cushion the effect on its citizens, such as buildings more refineries or repairing already existing ones.

If there are government officials who change something to enrich themselves, it is usually done by officials who like corruption and never care about the difficulties that exist in their people. That's why if you or anyone who is currently or wants to choose an official to be placed in a government agency, it's good to see how his behavior was in the past and you have to be able to make sure the person is really good so that he can be very suitable when in a government agency.

Because subsidies that can help the people or ease the burden on the people's lives are very reasonable subsidies for the government to maintain, because with this the economy of a country will always run smoothly because no one experiences difficulties. You yourself can see how the wheels of the economy rotate from the lower classes to the upper classes, where retail traders are traders who must also be considered because they are customers for traders in large quantities or wholesalers.

And it is because of this that if a subsidy is applied then a long term plan to keep the prices low once the subsidy is withdrawn should be mandatory for governments to implement, this way even if the plan was not perfect at least it will reduce the increase on the price once the subsidy was over, but a politician that cares about what it may happen once they are out of office is very rare and this makes the implementation of plans like that very unlikely.

Certainly removing subsidies from essential products and services can be a controversial and complex measure...indeed, it is a measure that governments sometimes take to reduce spending, ease the tax burden, and address economic problems. But I think that this decision has important implications for citizens and the economy in general.. Well, simply eliminating subsidies for essential products and services means a significant increase in costs for citizens. In addition to disproportionately affecting low-income people, as they might find it difficult to cope with the higher prices, and not only that, but it would trigger an increase in the prices of the affected goods and services, which could lead to a general increase in inflation.. which, in turn, can erode the purchasing power of the population and negatively affect the standard of living.

Petrol is not deemed essential in the majority of the world that I know of, this is going to vary by country and the geological layout vs the population centers I suppose.  The most many can hope for is cheap public transport like buses to be provided, I think subsidy on petrol would indicate either a commodity rich country or just a very helpful government as I've never had something like that in my favor.  
   In any country without alot of oil, massive taxes on oil, energy and car usage are often levied and its been like that for decades.   Its a big burden and almost equal to income taxes for some people.    I have mixed views on subsidy because it normally is paired with massive government and the larger the government that exists the greater the possibility for losses from that behemoth weight on the economy.   Theres always the chance of perfect government, ideal efficiency and perfect assistance to those that need it but I dont especially believe in such a dream hence subsidy is for food only and that is the essentials to the young and old imo.

That's the way it should be, to lift a sector to its feet when it's having a trouble but if it's constantly requiring it then there is a problem with it. We should try to subsidize things as much as we can to help them and then cut it, and we should have an ending for it at the same time as well meaning that we should be able to tell them "we are going to give you tax breaks and money help for a year, but then you are on your own" and if they can fix it that's great, if not then they are bound to die.

Let the market take care of itself I would say, if you do not do that and just do with welfare state for companies, then that's going to hurt. Welfare should be for people, not for companies and that is the most important part.

The subsidy idea in countries has been to alleviate the financial burden on importers so that the retail cost won't be much on her citizens. But some govt officials have turned the gestures to a scheme, enriching themselves with almost zero service delivery.

Do states have the power to do this? It is very difficult for us to see such moves when things are getting more difficult in shrinking economies. The state needs to support some production areas. Many countries have now turned to imports. Many products began to be monopolized as they turned to imports. This led to prices being determined by a single location.

States were late for such a move. Since they thought that many things will not be the same during the covid process, they withdrew many of their support. But when we came to the present day, they saw that they made a mistake for the support they withdrew. Now the cost of a production is more expensive than importing it.

I don't think it's the best time to remove subsidies during times of crisis hardship. If a government wants to remove subsidies for certain sectors they should be doing so during boom times, when it's much easier to find a new job. Families are still hurting from the covid aftermath and the rising inflation, no point in making it worth by removing subsidies. Another question is if the country can really afford to remove subsidies in the first place. For example the agriculture sector in western countries are no competitive anymore, wages are too high to produce cheap food. But can a country really stop producing any food and only rely on imports? With more wars happening now, rising number of droughts and general food prices already very high, I think that every country needs to have some farms. Subsidizing the sector seems like the only option for the government to keep farmers happy and not quit their job. When it comes to necessary and essential products, some form of autonomy is important in case of larger conflicts.

Subsidies can be very helpful as long as they are engineered correctly and generally set up to last a specific period of time. The thing to look out for is malicious arbitrage which can occur when certain actors will take the subsidized product and resell it elsewhere at much higher rates, to the detriment of the government and the originally intended beneficiary. If it's funded in the right way, for example from a slice of the richest it can be helpful in balancing out things like poverty. However people naturally try to personally gain from such regulated markers, so it requires constant vigilance and regular tweaking.

When the country falls into financial crisis, taxes are increased on the people of the country to ease the financial crisis, which makes the people suffer to subsidize the government. The government has created the idea that every product must be purchased by the people, so it has become a habit of the government to constantly increase the tax on that product. When the country is in financial crisis, instead of dealing with the financial loss by putting pressure on the people, the government should think of an alternative so that pressure is not created on the people.

The forum memberer to whom you are responding is one of those who does not see the overall picture. In healthy and productive economies a certain level of subsidy can be maintained. But the country's economy works in spite of the subsidy, not because of it. To think then that subsidy is good by system would take us to the extreme to a planned economy where if something is expensive for the people, either it is massively subsidized, or maximum prices are set causing shortages. That was seen in many countries in the 20th century, and it is still seen in some in the 21st century, little variety of products, queues, rationing cards, years to get a durable consumer good like a car, etc.

In general, people who defend this economic vision are too simple. Is anyone poor? We give him a subsidy. Is money needed? We print more. The price of a certain good or service is too high or too expensive? We set prices by decree.

In the end, there are natural laws such as supply and demand that cannot be controlled by decree, and this is what leads certain economies to disaster.

This is also what I've noticed: rich people are still availing themselves of it and enjoying it, which we know is not good because it should be intended for others. I can recall when the pandemic hit as most of my neighbors are rich and working in government, and only a few houses there are poor like us, but they also got a cash subsidy as well as food, even though they still go to work. I know sometimes that they are also affected by COVID, but they are still able to survive without it, and if those subsidies were given to others worthy, that could really help a lot.

Subsidy is really good and a much needed one. This is a way to enrich and uplift people from the lower level to next level of living. This is the real purpose for which subsidy came into effect. In most of the countries this isn't getting followed in the right way as we will be able to see people who are filthy rich enjoying the benefits of subsidy. This is where the governments need to be corrupt free and the data management should be done perfectly so that the right person receives the subsidy and there is no need of removal of subsidy to handle the ongoing economic situation ans burden the real sufferers.

This is where our tax comes in to help us help the government to clear some certain bills for us. Those who understand that capability of the government will know that there are some certain benefits we are enjoying now that is as a result of the tax and other things we pay the government so that it can help it citizens in some certain ways. Bad government has made life difficult for some persons especially in a country that care less about it citizens or what her citizens does. Some of these benefits that we ought to gain as a result of the tax we are paying are no longer there because of corruption.

Somethings are left not subsidized for some countries, look at UK and US for example, they either make something free for the people such as the health care and other basic amenities but not important product that will significantly pivot the economy when they no longer have the capacity to support it. Take for instance the Nigerian government and the new policy of no subsidized PMS, it has affected everyone becuase ever since beginning, corruption has eating government officials, they rather steal the allocated subsidized money than see it put into used and even with the money, the demand is high and supply is low and the new government decide to end the funding.

Google how Nigerians are trying to adjust with the new economy, you will be shock how people are suffering because fuel has literally affected everything in the country and PMS has returned to international price and since the marketers depends on foreign currency to export PMS in the country, it has affect the Foriegn exchange because the demand for $$ has deprreciated the price of Naira in the international market and as a result, every commodity in the country is affected.

The little lesson I learned from this subsidy is this, once people are use to a subsidized product price, it will be difficult to adjust to the unsubsidized rate, because the people will suffer for it; If the government can't forever subsidize price of goods, commodities, they shouldn't start it in the first place.

I understand why they should be giving subsidy to petrol/oil companies but at the same time we should realize that we are not going to end up with a good result if we keep at it. Which means that they should give even more to renewable energy companies so that they could get better. Whatever is managed with oil/petrol right now, should go towards renewable energy.

It's not even about the fact that oil is bad for the world, and we should use like solar or wind or whatever, that's not really the point right now, we are talking about a situation where it's renewable, which means that it's cheaper, plus you do not need to buy it from other nations, you could build a lot of centers in any nation all around the world. You would literally power entire USA with just like quarter of Utah sized solar panels. It's that simple, subsidize that.

Subsidy is a very broad topic in economics and in politics and it is because so many people do not understand the idea behind subsidy, that is why they complain and implement it wrongly.

• For the government of our country to subsidize either electricity, PMS or any other thing for her citizens, it therefore means that they have acknowledged that the minimum wage and purchasing power of her citizens is so poor to meet the standard of living.
• It is so dangerous to remove subsidy when the Citizens of the country have seen it as a normal way of life and not a privilege. Nigeria has been under subsidy for so many years and every government takes up the responsibility. That is why it had occurred to many of their citizens that it is their right. So the absence of the so-called subsidy has now activated suffering on the Citizens.

In order to create a balance, the government should endeavour to increase the minimum wage and fight inflation so that her citizens will have the purchasing power to fit the current price of PMS in the country.

Good point and yes it works like that for a lot of countries. Moreover, there are instances wherein big problems are being covered up by another problem and then the cycle continues. Then soon enough these problems are push at the back of everyone's mind and they just forget about it. In the case of subsidy, the government (not saying all, but definitely a handful of them) uses it to cover up some lingering issues and problems. It's like a cover up.

Yes, it is true, this is the main problem, especially for governments in developing countries. They offer quick solutions to get rid of a problem, but in reality they create dozens of other problems in the long term instead.

They care about getting rid of the current problem but they don't think about what might happen next in the long term.

Subsidy on PMS alone won't help but eat deeply into the annual budget of any country. If removed would help the government to expand to other sector, which is lacking attention. A supposed country where people get fuel and probably cheap transportation and yet complain of hardship, shows the result that the country is only pumping money into one sector, the oil industry. Scholarship will fail to thrive in such country, unemployment, underemployment, poor wages etc will become a major problem in the country, while they enjoy cheap fuel. Maintaining the fuel subsidy suffers the country's economy, as the government spend huge amount of money daily. Instead of cheap fuel helping the citizens, they go ahead abusing it; pump attendants defrauding people. Fine everyone wants in cheap, but not when the government is paying for it. The money can be channeled to other sectors, such that everyone in the country can at least benefit from the annual national budget. Looking closely into the complaints after the fuel subsidy removal, it's not far from what we hear in the past when fuel was subsidized. Hence, the citizens should adapt to the current situation, and observe if the government is helping the country by removing subsidy.

The quick solution is the subsidy itself, long term solutions which could drive down the price of goods would at the earliest take a few years to show any results, however since politicians hold office for a very short amount of time they tend to not care about solving those issues with long term solutions, as someone else will get to claim they solved that issue when it was them the ones that solved it, so citizens are trapped in the middle and as soon as the subsidy ends the price of goods skyrocket, especially when we are talking about fuel as everything requires fuel to be made or to be transported, increasing the costs of almost everything at the same time.

If the government decides to cancel subsidies on some basic materials, it must find quick solutions to cover the differences resulting from the rise in prices. Canceling subsidies without finding ways to compensate those affected by the cancellation of subsidies will cause many economic problems because this will create a state of stagnation in the markets as a result of high prices and the lack of purchasing power for most people.

Here in my country, for example, the government canceled subsidies on basic materials such as gasoline, diesel, gas, and some other basic materials, which caused a significant rise in prices and the inability of citizens to buy many goods due to the lack of salary increases, which created a gap in purchasing power, and recession began to hit Economy.

All subsidies eventually gets removed, when it does, citizens just pay normal price. Basic needs can't be escaped whether there subsidy or not.

I don't know how people will view it, but I'm not too familiar with the form that appears in the periods of each country's regimes, but I have seen and heard the stories of the previous generation about the period of life during the subsidy period, it can be said that a difficult period when many problems arise, what many people imagine about a mutual support in real life is rare yes, instead the corruption of disequilibrium still lurks in all its different shades, there are periods where even now I still witness some lingering prejudices about fairness to the extent of theoretical calculation (it's not fair in practice).
The reform period appeared, the economy opened up, and people were more free to develop than through the government control apparatus, I think the problem is whether the object of application here is really suitable for The current context or not, when different countries have different problems in the social system, so the adaptation in the operation of the economy is something that I clearly see for a progress.

When you say that you guess the government is trying to save money, you are not far from the truth cus that is actually the reason for the subsidy removal in the first place.

I live in the same country and like op already explained, the removal of subsidy from petrol in the country has made citizens to start paying more than 2x more for a liter of the product, compared to the amount a liter was sold before, this over 2x price goes where?, it goes to the government, so yeah, that's more money for them and for whatever project they are embarking on, but then, the big question is, can such a move save an economy that is already in shambles?

With the rate is of inflation, subsidy removal shouldn't be what a government should be thinking about right now. They should be making moves on how to reduce inflation. The price of every single product or service has skyrocket even when the price of petrol was subsidies, so imagine what would happen when the government no longer pay fuel subsidy.

Petrol has a ripple effect on everything in an economy because almost everything needs to be transported and this transportation needs petrol. So when the petrol price goes up, transportation price goes up, therefore increasing the price of goods and services even further.

For a country as corrupt as Nigeria, you can't even trust the numbers the government put out as the amount they they spend on fuel subsidy. They could be paying half the price they put out to the public while they embezzle the other half.
I am certain that the money won't be put into better use, it would just find it's way into some people bank accounts.

You just did in the other half of your response 


Factors like cost of living, standard of living, minimum wage, employment rate, inflation rate, per Capita income, availability of basic amenities and many more. All these factors should be considered when comparing the prices of petrol of two different countries.



It's not about what's better but what's sustainable and affordable by the government!
Yeah, everything is great if it's subsidized, let's have cheap energy cheap petrol, free health care, free everything, what can go wrong?

Well, I've lived in a country that had these, the pinnacle of communism where we had all these but with rations and we couldn't even afford them as we were dirt poor. Cause somebody has to pay for those subsidies and if the subsidies cost more than the returns you end up in the garbage bin just like the USRR and its satellite states.

I know it, it's great for poor people to have cheap lodging, to enjoy some affordable cheap food but if this is done in the form of subsidies somebody else is paying for it, and if the returns are not the same someone will have to continuously pay more and more for it till you have the entire population going poor and you have to subsidies them all from funds that are no longer there.

Been there, lived through that and I have seen it a hundred times, there is no way it is sustainable long term.

Honestly, subsidy is truly a good benefit from the government. It is their duty to give subsidy to the most important services that their people need. Petrol is one of it because everything is being run and using petrol / oil for every move. Transportation, energy, and anything that we're using is being done with the use of petrol unless there's another source of it. Health care is also one of it, if a government isn't corrupt, there's a lot of sector where the government can provide subsidies. That's gonna ease the inflation rate that's being felt by everyone. On the other hand, it should be balanced, I also did saw some countries that have been giving subsidies to their people but still don't do good with their economy.

Subsidies from the government can also fight companies that sell products at high prices. So that citizens can be more helped by having the same product from the government for a lower price so that citizens no longer find it difficult to get every product they want in their lives at a very affordable price level. This of course will greatly help the economy of the small community at the lower level because they can continue to rotate their capital in the small business they have to continue to make money in their life.

I agree more that subsidies from the government can continue to exist in all countries so that small business owners in each country can continue to operate and develop independently so that the country's economic conditions will also be better in the long term. Because if things like this can continue to be sustainable between the government and its citizens, then it will always give birth to prosperity in the community and there will be no prolonged difficulties in society.

You can't compare only the prices of petrol without looking at other factors.
Factors like cost of living, standard of living, minimum wage, employment rate, inflation rate, per Capita income, availability of basic amenities and many more. All these factors should be considered when comparing the prices of petrol of two different countries.


Which is better, to pay the subsidies and make things less expensive for it's citizens (who most of them are middle and lower class) or don't pay the subsidies and then the poor can no more afford that particular product, in this case petrol.
The price of petrol in a country like Nigeria affects everything. It's affects the price of every single goods because those goods are transported. So even if you're offering a service and needs no transportation, you will need to increase your rates in order to be able to afford stuff. That's a whole new level of inflation over again.

These countries, Venezuela, Iran, Nigeria didn't run out of money because their are no returns but because of mismanagement of funds of those responsible. When they run out of money to steal they come up with a different strategy.

Through subsidy the government has helped them directly. With subsidies, consumers are able to access cheaper products and commodities. Subsidy can be in any form such like cash, grants, or tax. With subsidies, consumers are able to access cheaper products and commodities. An through this, government gives people grants to support their businesses. Subsidy helps people in their hard time, huge people depend upon subsidy. It's main aim is to reduced prices, thereby improving the state of the economy.

My point is, you can't address every problem with a subsidy. Subsidy is necessary in certain aspects, but it can't be a permanent solution. If the government's response is merely subsidy, such government is not working. It's not diving into the root cause of the problem.

I once created a thread here about the price of onions in my country reaching as high as $13 a kilo. As expected, the word subsidy surfaced. I don't agree it's necessary. Why is it expensive to begin with? Perhaps there is a need to create a strong agricultural program for onion farmers. Perhaps there is a need to bring down prices of fertilizers. Again, not by way of subsidy but something else more permanent. Perhaps there is an urgent call to courageously confront cartels and hoarders and smugglers. Or perhaps there is a need to craft policies in relation to the handling of agricultural products.

I mean there must be a number of ways to confront a problem other than simply providing subsidy. Subsidy will indeed bring down the prices almost instantly. That will appease the public. That will give the administration a good face in the media. But will it last?

I am not satisfied with the fact that the money for subsidies is wasted. If social services are well developed in the country and any citizen can apply for help, then this reduces crime in the country. And for low-income families, this is one way to survive in a difficult situation.

I think what's more to be wary of is the people's overreliance of the subsidy given by the government. Well of course there must be a subsidy because we are paying taxes and that is where our money goes, to help each individual in need. However, if a person is only relying on it, for their food, for their shelter, for the allowances, then there won't be security in that.

People who become complacent in their life. They have a complete body yet not working. They are sitting on their couch all day blaming the government for the life that they have right now.

Let's not forget that a significant portion of any budget is spent or misused. You have to go through a lot to get a subsidy. Sometimes the amount of the subsidy does not correspond to the moral and financial costs of receiving it. Therefore, it is often worth considering whether you should start getting a subsidy or whether it is better to save your nerves

If, for example, subsidies are not removed, I think the government can still make some changes to economic growth as long as the government can arrange every step needed by its citizens. Because in general subsidies can also help most people get the things they need every day at more affordable prices, so if the government continues to implement this, I don't think the economic conditions themselves will be too disturbed. Especially if there are some people who still really hope for subsidies from the government and do not agree with it being abolished.

Almost all government parties are very concerned about education, infrastructure, and industry in their own country. The point is to maintain development stability and also a more capable economy every year, because when these three things are always actively used by all people, of course the benefits that can be felt by the community and the country will be very visible. So that economic growth and education will also be better, especially if there is always support from the government itself for these three things.

The subsidy can be given by government if they are stable enough with the national reserves and their yearly revenues. From where they fill the treasury? From the taxes that we pay so definitely we need subsidy but we also need population that is strong enough to pay their taxes on time and every time. Various countries do not get as much taxes as any powerful or highly developed country gets. This leads to under income of the government and thus over burden on planning and executing the schemes like subsidies. Apart from this we need to understand that subsidy is not free coupon, we do have to payback the left over amount all the time along with interest. Many people fail to do it.

There are no silver bullets in society that have only upsides. Point of subsides and other kind of government interventions is to keep society functioning and citizens spending, money rotating and workers healthy.

You can argue what are the best policies for buildng a society, but every way has a negative and positive effect. Political science and economy is are complex fields where everything affects everything else and like in a jenga game removing one building block can crash the whole system or weaken the whole structure.

So asking if it's needed, it obviously is. But in which cases is a whole different issue. It isn't really "is it good or bad" kind of question.

Sometimes despite the health services are free, some of the hospital doesn't have enough equipments and staff to assist the people especially when it comes to emergency. You'll be given a bed or wheelchair but you will wait for hours before they even take care of you so just imsgine if that's the situation and you're dying right? I'm not blaming the hospital itself but the government, due to its corrupt system it can't even provide a good facilities, enough salary from the staffs and equipment for the public hospitals. With that case some people would still go for the private despite the cost due to the comparison of the services. In short even when there's subsidy applied if the government itself is corrupt maybe it's useless.

Unfortunately in my nation subsidy just means one thing; government helping out their family members. We have seen too many companies that are not crucial to the public end up getting part of our taxes just because those people ended up getting paid for it as well.

I want to point out that anytime taxes are used for anything but making the nation better, it is going to end up making it worse, there is no natural side of things, it is not going to end up being a bit of a change in the end and I feel like we are not going to see just straight up no change, we either do something good that helps all citizens, or if we are not using taxes like that, then it means we are doing something that will hurt them, those are the only options.

The subsidies don't come from the sky. The government must take money from someone in order to give subsidies to certain businesses and groups of citizens. It's all about redistribution of wealth. I'm against subsidies, because many businesses become dependent of them and they lose their competitive advantage the moment the subsidies are taken away from them. I'm also against subsidized prices of goods and services(even food, gas and oil), because this deviates the free market and lowers poor people's motivation to develop some skills and find a better paying job. Having high levels of resource redistribution is mostly bad for the effectiveness of almost every economy around the world.

I do believe in the social welfare state, so I think that the taxpayers' money should be used to provide or at least make more accessible essential services, but the subsidy isn't a great measure because it can be removed. It can only work as a temporary measure, and I guess that's how it's often introduced, but removal of the subsidy should be planned in advance, and occur gradually to allow people to adapt. I think proper programs of social security are better than measures like subsidies, unless we're talking about the state subsidizing certain industries (like public transportation, for example), which is different because it's not on the level of individuals and can be a long-term commitment.

At this juncture, I don't know how else to explain to you since I believe you don't even know the meaning of what I wrote thereby dragging what is unnecessary or you are just the type that is blindly proving a point while deviating from the true content of the matter.

Regardless, I stand by my points, perhaps you want me to say that a sane country should subsidize with lies, corruption, and in a bad economy (irony). I won't mislead people.

Take that if that's what you want and leave others to believe what they know is right.

The subsidy mechanism, as almost any entity has always two sides - positive and negative. It all depends on why and how this mechanism is used. In some situations, the state should really support local producers. But there are nuances - it should not be "maintenance on a permanent basis", i.e. business should not become a keeper at the expense of budgetary funds, while budgetary funds are taxes of citizens.
To all this, there are a huge number of other nuances - from the standard of living in the country, to corruption.... In a word - it is possible and necessary to use it, but in a dosed manner so as not to cause "intoxication"....

At most subsidies should be temporal in nature and they should be offered with certain conditions attached to them, if subsidies were used that way then even those that do not like them will at least tolerate them, but politicians see in subsidies a way to gain more power, and they make all kind of promises they know they cannot fulfill, but by the time this happens they will be out of office so they do not care, then whoever gets elected does the same, kicking the can and increasing the problem, but eventually a point is reached in which the consequences of those heavy subsidies cannot be hidden anymore and the economy does badly as a result of this.

That is a very good point. Too much help can make individuals negatively confident that they do not have to apply any effort and just depend on the subsidy they are getting to pay for their needs in life. Another good point on how politicians uses subsidy to gain control of the public. In my country, a lot of issues like that are always around during government election.

I am more of a libertarian ideology, that is, I believe that it is better for societies to keep subsidies to a minimum, because the problem is that they discourage effort. There are extreme cases in which I agree that they should be given, what happens is that politicians immediately take a liking to distribute subsidies, which in many cases is a covert way of buying votes and abusing them you get to extreme cases of societies like Argentina that are a disaster because they have a very high level of subsidies but the population suffers hardships.

The people will be increasingly squeezed due to limited income while spending will increase. the consequence of eliminating subsidies will reduce economic growth in the country which has a fatal impact on the continuation of people's lives. Without subsidies, it will increase the number of unemployed, which will lead to an increase in the poverty rate, increase in the price of goods and services and inflation will occur in the country's economy. Health subsidies are urgently needed by the people, especially for those who fall into the middle to lower economic class. The most dire impact of the removal of health subsidies is that the death rate has increased because people do not have the funds to pay for treatment at the hospital.

Most likely yes, but of course, it's not instant, Building the country with a full State Budget will make the government easy to manage it. Because as far I know, the problem of the developing country now has a minimal budget for infrastructure and stabilizing the economy. Because the budget is used for subsidy help the people. I admit it really helps in the current situation from Inflasi, reses, and covid recovery, but that strategy is not good for the future because funds for development are hampered, and more is spent on subsidies.

Just imagine coming from a country where the health services are free and hospitalizations are mostly taken care of by the government. Then you'll be going to the US, where you thought it was free but it ain't. It will really affect you financially because you'll shoulder it. It really gives a hard time to the citizen, but we hope that the government will not remove it. It is mostly about educational assistance for students, but again, it doesn't mean that we just rely on them; we should also do our hardship.

There are always two sides of every policy one is good for some portion of population and another side, it effect negatively because if they are getting everything in free then they will become more lazy and dependent on government. Subsidy is good for developing nations for Reduces Cost and Inflation, By reducing costs, subsidies help keep inflation in check and ensure the optimal function of the market. Subsidy is important in a developing economy because With subsidies, consumers are able to access cheaper products and commodities.

You are lucky that you have a government that subsides your petrol. But then again it's a privilege that can be taken anytime and so that's what they do? For me? I will strive hard as I know I don't have the petrol subsidy already.

Or maybe you can tighten your belt, save money or get other means of transportation so that you won't used your car like everyday. It's could have a pros/cons of the removal, but I guess your government is trying to save money as well and uses to other projects or top up other subsidies that is very important to the population.

In general, I'm not a huge fan of subsidies. Subsidies might be necessary in some instances, but I think it should be considered as the last resort. To a certain extent, a government that has limited resources but is all too willing to provide subsidies left and right is an incompetent and lazy government. It's a government that's not creative or innovative enough, a government that doesn't study, analyze, and look for other ways and means to improve certain conditions. Subsidies are dole-outs. They're a band-aid solution. They're not sustainable. Money put into subsidy is most often money that is wasted.

In my country, subsidy is quickly considered as a response more often than it should be. A rising price of rice, subsidy. A rising fuel price, subsidy. A rising transportation cost, subsidy. Onion price rising, subsidy. Poor families, subsidy. Retirement benefits and pension, subsidy. It's subsidy everywhere. It's not even counting the huge tax subsidies that it also provides to companies and businesses. Almost all departments in the governments are now providing subsidies. For goodness' sake, can we not explore other options?

If that would happen, people will be driven to criminal activities, and there will be a lot of social unrest, which might even eventually result in revolution. But even without revolution this unrest could cause so much damage that it would surpass the spendings on subsidy.

Some people might believe that any redistribution of wealth is unfair and is equal to robbery, but for society as a whole it's a net positive if done right. Too much redistribution will definitely hurt the economy, but too little redistribution is quite dangerous.

Well from my view spaceman1000$ don't you think this is a master minded game played by the new government and how are we sure if there where fuel subsidy in the country?
Same products our government keeps importing since they weren't able to our fixed refineries, we had Portharcourt Refinery at Eleme and I think there is other at Lagos and other places why can't they fixed them and stops wasting money to import a buy products from other neighboring country.

We had the capacity and resources to fixed our refineries but it is being politicize which since they had a serious allocation for it and is going to their personal account they wouldn't want to fixed up those refineries across the country and yet there are lot petrolatum engineers graduating from our universities, how come they studied those courses without us having a functional refineries to properly equipped them on their field of study. Well I don't want to delve into details of our there nation as it has been taken over by greedy leaders who doesn't have love for her citizens.

Subsidies have no downsides, so I don't think their absence will produce any form of positive effect on anyone cause yet again, at the end of the day no matter how we thank the government for giving us these things, they take the funds and the capacities from our own pockets in the form of tax. So if the government were to remove subsidy programs, what would they do with the money that's dedicated to subsidy? What would they do to replace this effortless program that provides lots of benefits with no downsides?

Subsidies only become a problem when they are used on stupid things, so perhaps it's not subsidy that should be abolished or what even in this theoretical analogy you made OP, perhaps the one's to be abolished should be those that make stupid legislations and decisions in the government!

Subsidies aren't capitalistic in nature and they become a problem when the government starts subsidizes entities with a negative ROI or things that don't actually have a net benefit to the citizens. I'm generally against the government picking industries to subsidize with tax payer money unless there's a benefit to every single citizen (and of course, there's no way to determine the "winners".)

The energy sector and agriculture sector provide a net benefit to every citizen, those are acceptable. But the types of subsidies matter as I've seen government provide subsidies to green energy companies, to the tune of billions, only for those companies to go bankrupt a short few years later. And the companies that get these subsidies are often political donors. It's not necessarily corruption, but it isn't fair for the citizens to have to bear the cost of a politicians political favors either.

Subsidies are just theft!
The government is stealing you money though taxes and then they are buying your votes with subsidies.
How would a subsidy on petrol help the poor, only 6% of the population owns a car, if you want to help subsidize transportation not fuel that would end up smuggled.

The romans had a great saying, "panem et circenses" bread and circus, feed your population with cheap bread and give distractions and you will have a submissive population, same here, tax the fuck out of them in all means, do nothing for healthcare for education for your industry but give them cheap fuel and build a few stadiums for football matches and you're set.

That's sad to hear, but my situation in my country is more worse about this kind of issue about the Petrol. Because in your country they have subsidy to give from the Petrol to give to it's citizens, but in my country there's none plus the cost of the petrol is increasing fast due to inflation rate that affected the Petrol. Of course it gives a negative impact to the people especially to the people who needs petrol for their motor vehicle for their work. Imagine you working to provide for your needs and the little help the government could give were taken away? Nah one thing that first come to my mind in this kind of situations are corruption.


I think if they implement this kind of policy in the country of course there would be a substitute like giving them a job, shelter or even education. As long as those money that were taken away from the subsidy would be use wisely to improve the country. I know that they are having a hard time to determine where to focus investing their money in any country. For example in my country which is PH, they invested at skyway and new railroads since one of the major problems here is traffic. Of course due to those investment there would be a hard time to provide the subsidy for the people. Maybe if there's no corrupt officials maybe losing subsidy despite of investing to any other projects, subsidy would still exist.

Of course subsidy is good as it helps a lot of people in need, specially with the state of the market these days. However, governments should know when to cut off and just how much budget they should assign towards it. It is understandable that a lot of people are dependent on such subsidy, but it should be noted that other areas needs more attention and budget much like education and health.

I think removing the subsidy completely on essential goods like petrol is removed completely. However in my opinion government shouldn't spent the more money on subsidy than on more long term thing like education and health. The more possible way may limit the subsidy, so the government could only subsidize petrol for commercial truck that are used for distribution, and public transportation so the price of other product wouldn't be affected.

If your government remove the subsidy, it's mean they're currently not in a good financial, so they can't just cover up the primary needs to make the poor afford to buy it. However is your country charge a high tax? the government earn a lot money from tax, so it must be the rich not paying tax.

If the rich keep evading tax and the financial problem in your country is still not recovered, I would say beware of inflation and the possible banks going to bankrupt.

If the issue is bothered on smuggling, then the government should be proactive enough to stop such illicit activities as such, the entire economy shouldn't be brought to her kneels because of that.
There is no amount of direct support system that can be too effective as to reducing the effect of the subsidy removal, because prices of goods and services will automatically raise and I think the government cannot give support to every household.

Is the problem subsidy or corruption? In case you don't know many developed nations subsidy many products to help people live a good life. And these nations make the process transparent and void of corruption. You don't need to "throw away the baby with the water, you keep the baby and throw away the bathing water". My point is clear @EarnOnVictor tackle corruption and leave subsidy. If your sole reason for removing subsidy is because of corruption, then it's not good. What happens to the people that benefit from it?

If the government wants to stop subsidy because it cannot be sustained due to a fall in revenue or economic challenge, it's a better reason. Now the question you will ask yourself is that who is making the subsidy process corrupt? It is still the government. The money saved from subsidy will be shared among state governors through the Revenue Mobilisation Allocation and Fiscal Commission and most of these funds will go to private pockets. If the government makes the fuel subsidy process transparent, it will alleviate the suffering of the masses.

The problem of direct support for commodities such as fuel leads to smuggling, as someone can buy fuel at a price and try to sell it at the border at twice the price, and here it will lead to the state importing more fuel and thus more unnecessary expenses.
Direct support for individuals is much easier because you will spend a lot of money to ensure that the goods subsidy goes to the needy, while direct support you can transfer money directly to the bank accounts of individuals and through it make sure that they are in need or not, while direct support means supporting all classes, rich and poor.

Can you hear yourself, still contradicting what you wrote by yourself? Apart from the fact that you brought it out of a bundle of meanings before detaching that for the purpose of finding your contradictory meaning to it, the word "Subsidy" is meant for a purpose, and when the purpose is defeated by corruption that can't be solved or affecting the nation's purse, then it's useless. Subsidy-mixed with corruption is a burden to any country and its economy, especially when there is no progress or hope for it, it makes no sense to continue it with such an equation.

You don't subside when you don't have the muscle for it and when it is lined with corruption, subsidy is never by force, it's a privilege. Particularly when politicians are pocketing much of it and are not accountable for any reason, for whose gain is now the subsidy? To what end?

Therefore, I repeat in more simplified words in case you don't understand, a subsidy built on corruption in a bad economy is highly irresponsible and will always backfire.

You know, instead of removing the subsidies, most government should stop favoring the rich people and let them get away not paying their due diligence to the country. Also, a corrupt government will not be able to revive or heal a downed economy no matter how because they're lining their pockets with the money that was supposed to be used to fix the problems in the economy.

Corruption is not a genuine reason to stop subsidies. It is the government thet is corrupt and not the process of subsidizing these essential products. Removing subsidies is causing so much hardship and some businesses have closed down. While many people have been pushed down to abject poverty. What the government would have done was to identify these avenues of corruption and deal with them. Loopholes and financial leakages should be identified and standard financial and accountability strategies should be put in place. The painful part of it is that the funds saved from the removal of subsidies will still be looted by these corrupt government officials.

This will be a good policy if the government will sincerely use the money that will be saved from subsidy removal to invest in the country. If the saved funds will be used to build basic infrastructure that will lead to development, then it is good. But if the money will be misappropriated and stolen by corrupt government officials, subsidies should continue. In some countries, subsidized goods or services are the only benefits they get from their government.

Imagine how this sounds for a European who pays double the petrol and diesel cost since half of the price is just taxes!

It's pretty simple your country can't afford to pay the subsidies anymore, I can guess it's Nigeria??
Same thing anyhow, you can't offer subsidies if the returns are not worth it just to keep your people happy, In Venezuela, and Iran, at one point you run out of money, and then you have to face the reality that you were just wasting taxes to keep the population under control.


Subsidies can be also toxic leading to a country paying more to produce something than it would have had paid by importing something and simply paying a normal wage to the workers employed even if they won't be doing a thing
Sometimes agriculture subsidies go so high that with all the insurance and damage relief included they are over the actual price of the product.

The subsidy is good, but only with a progressive government and economy, it's a way the government gives back to the people which I believe is also the right of the people when they have a responsible government. However, the subsidy built on corruption, and also by the regressive government will certainly backfire. That is the case in Nigeria right now.

Also, the government's approach to subsidy should be dynamic depending on how progressive or regressive the economy and government finances are. If static and delayed for too long before acting, it would cause damage more than what they were intending to solve initially by it.

There are lots of things as citizens that we've enjoyed especially when it comes to essential things that government of our various countries have subsidize.
For some countries, government has helped in subsidizing food production, electricity, education,  transportation, health care services etc.
This subsidy goes ahead in reducing financial burden on the citizens.

 for some it is one way the government has helped them directly, because government gives them grants to support their businesses.
So I ask, what will happen if the government remove subsidy from some of the essential things that they helped citizens to subsidize, for example, fuel, electricity, food production, health care services etc.

Because I leave in a country, where the subsidy for PMS(petrol) has been removed, and almost immediately, the citizens are feeling the effect of the petrol subsidy removal.
The shocker this singler act has sent to the  spine of the economy of my country is second to none.
At this point, I've realised that, subsidy is one gloomy light that shouldn't be dimmed further  by any government.
Cause what other better ways can the citizens benefit from her government if subsidy is taken off from those essentials that directly touch the standard of living of the citizens.

What do you think? Is government removal of subsidy from essentials products, services at this period of economic hardship people are facing the best policy a  government can embark on in the process of building her dwindling economy?