THE lifting of the fuel cap essentially marks an end to the fuel subsidy even for the B40. The “targeted fuel subsidy mechanism” is basically a cash transfer scheme that lacks the characteristics of a subsidy, and this is worrying because cash recipients do not have the obligation to spend on fuel.
One of the most important considerations that, in my opinion, is missing from the subsidy debate is the impact of higher consumption of subsidised goods. While it is true that subsidies will likely lead to higher consumption of the goods, we should also consider the impact of the change in consumption.
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