Text A, paragraph 2
Additional reforms include upgrading old infrastructure and offering incentives to private sector firms to invest in projects that will improve productive capacity. Some government policies are already being implemented. These include a large power plant construction program, tax incentives to infant industries such as oil refining to help attract more investment, and tax cuts for industries like transport, telecommunications, metal production and agricultural processing. In addition, there has been a decision to reduce fuel subsidies to contribute funds towards the government’s record US$22 billion in infrastructure projects. The subsidies had kept fuel prices low in a country where millions of people live in poverty.
Using a demand and supply diagram, explain the impact on the market for fuel of the Government’s decision to cut fuel subsidies (Text A, Paragraph 2).