The government tried several times to remove the subsidy, but each time faced mass protests and was rescinded — until 2005, when it succeeded in removing the subsidy without popular protest despite a 50% increase in fuel prices.
The secret to success is adequate preparation, extensive information and the introduction of various financial compensations.
Rebellious
These include increasing social subsidies, abolishing tuition fees in public primary and secondary schools, increasing the number of public transport buses, introducing a ceiling on public transport fares, and better funding for health care. poverty-stricken areas, raising the minimum wage and investing in rural electrification.
Indonesia also subsidizes fuel usage 2.2% to 2.8% of GDP. The government has tried to remove the subsidies since 1997, but has failed each time due to widespread protests. It finally took off in 2005-2008.
The keys to success have been increased social subsidies (cash handouts to the poorest), improved health care and education, and easy loans for small businesses.
These measures minimized the number of dissenters and boosted the president’s approval ratings. The reasons and purposes of these measures have been fully understood by the public, which has greatly promoted the understanding and acceptance of the measures by the society.
In Iran, fuel prices remain extremely low Before 2010, there were huge state subsidies. However, in 2010, the government removed the subsidy, causing fuel prices to quadruple overnight. Not only did the people not resist, but they almost unanimously supported it.
gasoline
The secret to success is good preparation, extensive information and adequate compensation. 30% of proceeds go to companies supporting energy saving measures and energy efficiency investments.
Another 20% is allocated to the public sector (schools, hospitals, etc.) to offset increased energy costs and improve their energy efficiency. 50% of the proceeds are distributed at $40 per month to each resident — except for the wealthiest 20% of households.
Compensation for high oil prices benefited most households, and the reforms promoted social equality. The poorest benefited little from low gas prices (they often didn’t own cars), while compensation paid by the government greatly improved their living conditions.
The reforms dramatically reduced poverty in Iran, which led to significant moral support for the government. The reforms also boosted domestic demand, boosted growth in the non-energy sector and lowered unemployment.
In 2008, Switzerland introduced a carbon tax Most fossil fuels (although gasoline and diesel are not taxed), gradually increased from an initial CHF 12 to CHF 120 per ton.
Distributed
Household fuel is also subject to this tax, and all Swiss residents receive an equivalent monthly cash compensation from the state. This means the less household fuel you use, the better off you are.
In Hungary, during the first half of the 1970s, meat products were heavily subsidized, and all the negative consequences that follow. In 1976, the government removed subsidies, causing meat prices to skyrocket.
At the same time, all Hungarian residents received a monthly compensation of HUF 60 (a considerable sum at the time), which benefited the vast majority of the population. The poor are the happiest because they eat much less meat than the average person and can buy the cheapest meat.
Hungarian Environmental NGO clean air action group recently developed Proposal for mileage-based taxation backed by calculations Cars and trucks while compensating the population. By implementing the proposal, 80% of the population will benefit (only the richest 20% will suffer some losses).
Therefore, the savings from repealing these measures should not be misguided, but should be distributed equally among the population, excluding a certain percentage of the highest income households.
the author
András Lukács is President clean air action groupa Hungarian environmental NGO.
