Impact of the increase in the price of smuggled gasoline on the Beninese economy: an analysis using a dynamic computable general equilibrium model

This paper aims to study the impact of an increase in the informal oil price on Benin's economy. To this end, we have opted for a dynamic computable general equilibrium model calibrated on data from the 2015 Social Accounting Matrix (SAM). The two simulated scenarios involve an oil price increase of 50% and 5%. The results show that an increase in the informal oil price harms GDP, leading to higher production costs and lower wages and incomes for resident agents. The sectoral analysis reveals that this rise affects more the oil-intensive sectors. Overall, our model predicts that the impact of higher prices for informal refined oil from Nigeria hurts Benin's economy. The authorities should implement policies to reduce Benin's dependence on the informal oil trade.