Providing people with fuel subsidies is a positive policy as it enhances the quality of life in addition to helping the needy address a part of their financial problems.
Do you agree or disagree?
The issue of supplying the public with low-priced fuel has been a source of contention for long. Unlike some who concur with granting people subsidized fuel, I am of the opinion that subsidization of energy can neither promote underprivileged people’s welfare nor create economic prosperity due to the reasons which will be discussed in this essay.
First and foremost, deprived households account for a very small proportion of total fuel users in each country that is why subsidized fuel could help affluent families, who use a great deal of energy, more than it does the poor. For instance, vehicle ownership is low among disadvantaged households, meaning they get the least benefit from inexpensive fuel.
Secondly, state-sponsored fuel is an enormous drain on government budget that may help the needy in a more targeted way. In other words, cutting fuel subsidies will save spending that administrations can divert to much-needed professions via building industrial infrastructure. Take Iran as a case in point where unemployment rate has exceeded 12%; nonetheless, close to $35 billion is squandered on fuel subsidies per annum that could have been used not only to bolster public health and education but also to flourish economy.
Last but not least, fuel subsidies can have an array of side effects that directly impair quality of life. Traffic congestion as well as noise and air pollution are two of the most striking. Regarding the former, inexpensive gasoline would encourage millions of individuals, even the low-income brackets, to possess their own vehicle the result of which is heavily congested motorways all over cities. Should energy subsidies be lifted, it would free up funds that can be allocated to modernizing public transport. Furthermore, supporting fossil fuels may repress the development of renewables namely solar and wind farms that can help curb countries’ greenhouse gas emissions.
The bottom line is that underpricing energy burdens the poor more than the rich as most subsidy benefits are reaped by higher-income families.
Mollazadeh
Word count: 350
Time: 60′
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