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Submitted by kafula on
I find the analysis interesting. However, the analysis should have first looked at the impact of fuel rises on the cost of production in the private sector. The allocated subsidy can either be used in lowering the cost of fuel, consequently, feeding into lower production costs or the same money used for the subsidy can be channeled to government development projects. The argument should be whether the subsidy is more effective in implementing the government projects as opposed to helping alleviate the high costs of productions in the private sector. A subsidy on fuel can be good or bad depending on the relative effectiveness of the subsidy between the alternative uses.