The IEA Proposes Fuel Subsidy Removal To Ensure Energy Security
The IEA Proposes Fuel Subsidy Removal To Ensure Energy Security
In order to achieve energy security, the International Energy Agency (IEA) has argued that fuel subsidies should be eliminated, particularly in nations like Nigeria which depend heavily on natural resources.
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The IEA stated that inefficient fossil fuel subsidies are a significant barrier to a more sustainable future in its October 2022 World Energy Outlook (WEO).
Although it is socially necessary to safeguard society’s most vulnerable members, the report pointed out that one of the most obvious disadvantages of fossil fuel usage subsidies is the financial burden that it places on nations.
Therefore, countries need to secure their energy transition by removing inefficient fuel subsidies. Payments for fuel subsidies have been on the rise between 2021 and 2022 after a noticeable dip in 2020.
The IEA Proposes Fuel Subsidy Removal To Ensure Energy Security
According to the IEA, governments need to harness the vast resources of markets and incentivize private actors to play their part. Governments need to put in place stable, and predictable long‐term market frameworks designed to support the achievement of their goals.
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The IEA estimates that high fossil fuel prices and additional measures to protect consumers during the energy crisis could lead to a further sharp increase in fossil fuel subsidies in 2022.
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