Economic Impact of Energy Subsidy and Subsidy Reform Measures: New Evidence from Jordan
DOI:
https://doi.org/10.18533/ijbsr.v4i4.428Keywords:
Energy subsidy, Subsidy Reform, Government Intervention.Abstract
The objectives of the study are to shed light on the characteristics, policies and system of energy subsidy in Jordan; to identify the economic impact and the reform measures of the energy subsidy. The research methodology is descriptive and analytical based on a questionnaire to survey the viewpoints of a convenient sample of economic experts on the research questions. The study concludes that although the energy subsidy has a positive social impact on the poor, it has unfortunately negative impacts on governmental budget, distorted the energy pricing mechanism and led to inefficient utilization of the scarce economic and financial resources. The study recommends rationalizing the energy subsidy in the short run by directing it to the targeted underprivileged consumers and the gradual removal of subsidy in the long-run.Such a step should be accompanied by social net programs to alleviate the burden of hiking energy prices on the poor..
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