Public Perceptions on Energy Subsidy in the MENA

Munsu Kang ()
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Munsu Kang: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] , Building C, Sejong National Research Complex, , 370, Sicheong-daero,, Sejong-si, Korea, https://www.kiep.go.kr/eng/

No 24-16, World Economy Brief from Korea Institute for International Economic Policy

Abstract: In the Middle East and North Africa (hereafter MENA) region, fossil fuel subsidies have been utilized as a social protection mechanism, serving as a tool under the social contract. Previous studies have primarily focused on the social welfare implications of abolishing fossil fuel subsidies. In this study, we aim to answer the question of whether the public in the MENA region prefers social protection services as an alternative to fossil fuel subsidies using online survey results in four countries including Egypt, Jordan, Saudi Arabia, and Tunisia. The survey results reveal that respondents in the MENA countries prefer energy price reduction (or stabilization) policies over pro-poor cash transfer programs. However, respondents answer that they prefer support for vulnerable groups above government-led energy price reduction policies when there are energy price shocks. Why do people agree to reduce subsidies? Some of the concerns regarding the energy subsidy is that subsidy policies are more pro-rich in nature and benefits are unequally distributed. However, respondents who answered they prefer to maintain or increase fossil fuel subsidies mention that the subsidy policy could benefit all. Based on the results, two key policy implications emerge. First, social protection programs must be carefully designed as an alternative to energy subsidy reform. The second key policy implication is the importance of effective public campaigning and awareness-raising around the need for energy subsidy reform.

Keywords: MENA; energy subsidy; public perception (search for similar items in EconPapers)
Pages: 10 pages
Date: 2024-05-31
New Economics Papers: this item is included in nep-ara and nep-ene
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