Why Should Gasoline Subsidies Be Removed and Gasoline Sold at International Prices?
Introduction
Gasoline subsidies are a form of government support policy implemented in many countries to reduce living costs for citizens and support domestic production. However, in the long term, this policy can lead to negative economic, social, and environmental consequences. This article examines the reasons for removing gasoline subsidies and selling gasoline at international prices. Additionally, it proposes solutions to mitigate the negative effects of this policy on vulnerable groups and prevent social crises resulting from gasoline price increases.
1. Reasons for Removing Gasoline Subsidies
1.1. Misallocation of Resources
Gasoline subsidies cause government financial resources to be allocated to supporting fossil fuel consumption instead of being invested in productive sectors such as education, healthcare, and infrastructure. This misallocation of resources disrupts long-term economic growth. According to World Bank studies, energy subsidies in developing countries often benefit the wealthy more, while low-income groups receive a smaller share of these subsidies (World Bank, 2015).
1.2. Exacerbation of Environmental Pollution
Gasoline subsidies increase the consumption of fossil fuels, leading to higher air pollution and climate change. According to the International Energy Agency (IEA), removing fossil fuel subsidies can significantly reduce greenhouse gas emissions (IEA, 2021).
1.3. Encouraging Energy Efficiency
Selling gasoline at international prices incentivizes consumers and industries to adopt energy-efficient technologies and renewable energy sources. This shift enhances energy efficiency and reduces dependence on fossil fuels.
2. Supporting Vulnerable Groups and Creating Economic Opportunities
2.1. Universal Basic Income (UBI)
By removing gasoline subsidies, the government can allocate a portion of the freed-up resources directly to low-income groups. This financial assistance can be provided in the form of Universal Basic Income (UBI). UBI is a support system where all citizens or specific segments of society receive a fixed monthly amount. This approach helps improve quality of life and reduce poverty (Standing, 2017).
2.2. Supporting Domestic Production and Knowledge-Based Companies
The government can allocate part of the resources saved from removing gasoline subsidies to support domestic production and knowledge-based companies. This not only increases employment but also contributes to sustainable economic growth.
2.3. Developing Public Transportation Infrastructure
With reduced gasoline consumption, the government can invest more in public transportation infrastructure. Improving public transportation systems not only reduces air pollution but also lowers transportation costs for low-income groups.
3. Lessons from the 2019 Protests and Preventive Measures
3.1. Analysis of the 2019 Protests
In 2019, the sudden increase in gasoline prices in Iran led to widespread protests. These protests demonstrated that price changes without public support and adequate compensatory measures can lead to social crises. According to human rights organizations, these protests were met with violence and repression, resulting in casualties (Amnesty International, 2019).
3.2. Preventive Measures for Similar Crises
3.2.1. Public Awareness and Participation
Before implementing gasoline price increases, the government should engage in dialogue with society and civil institutions, clearly explaining the reasons for these changes. Public participation and transparency in decision-making can build public trust.
3.2.2. Gradual Implementation of Price Increases
Instead of sudden price hikes, the government can implement increases gradually over specified periods. This approach allows society and industries to adapt to the new conditions.
3.2.3. Providing Support Packages
The government should design appropriate support packages for low-income groups simultaneously with gasoline price increases. These packages can include cash assistance, public transportation subsidies, and support for vulnerable jobs.
Conclusion
Removing gasoline subsidies and selling gasoline at international prices can improve resource allocation, reduce environmental pollution, and enhance energy efficiency. However, this policy must be accompanied by appropriate social support measures to prevent economic and social harm to low-income groups. The experience of the 2019 protests demonstrates that implementing such policies without public support and adequate compensatory measures can lead to social crises. Therefore, the government must ensure transparency, public participation, and the provision of support packages to successfully implement this policy.
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References
- World Bank. (2015). *Energy Subsidy Reform: Lessons and Implications*.
- International Energy Agency (IEA). (2021). *World Energy Outlook*.
- Standing, G. (2017). *Basic Income: And How We Can Make It Happen*.
- Amnesty International. (2019). *Iran: Details of 304 Deaths in Crackdown on November 2019 Protests*.
