IDEAS home Printed from https://ideas.repec.org/h/wsi/wschap/9781848161030_0005.html
   My bibliography  Save this book chapter

The Uk Petroleum Fiscal System In Retrospect

In: The Uk Energy Experience A Model or A Warning?

Author

Listed:
  • ALEXANDER G. KEMP

    (Department of Economics, University of Aberdeen, Dunbar Street, Aberdeen AB9 2TY, UK)

  • LINDA STEPHENS

    (Department of Economics, University of Aberdeen, Dunbar Street, Aberdeen AB9 2TY, UK)

Abstract

This paper examines the performance of the UK petroleum fiscal system introduced in 1975 from the viewpoint of a mechanism designed to collect economic rents. The many changes in the period to the early 1980's made the system less well-targeted in economic rents and could have caused investment disincentives. The subsequent changes to a more profit-related basis generally produced an economically more efficient system. The number of changes were excessive and were motivated by short term revenue considerations. Conceptually PRT is a tolerably appropriate instrument to collect economic rents but the specific one introduced in the UK has unnecessary complexities. The safeguard could have been omitted. The package of changes introduced in 1983 led to exploration effectively being subsidised. Some restriction crossfield exploration relief, say to a contract area basis would have mitigated the problem. The removal of PRT on new fields in 1993 while increasing UK competitiveness also increase political risk. The multi-tier system may distort investment decisions. The decision to levy PRT on tariff income was probably justifiable in the early 1980's but with increased competition among asset owners and the non-level playing field its continuation for new contracts is open to question.

Suggested Citation

  • Alexander G. Kemp & Linda Stephens, 1996. "The Uk Petroleum Fiscal System In Retrospect," World Scientific Book Chapters, in: G MacKerron & P Pearson (ed.), The Uk Energy Experience A Model or A Warning?, chapter 5, pages 61-78, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9781848161030_0005
    as

    Download full text from publisher

    File URL: https://www.worldscientific.com/doi/pdf/10.1142/9781848161030_0005
    Download Restriction: Ebook Access is available upon purchase.
    File URL: https://www.worldscientific.com/doi/abs/10.1142/9781848161030_0005
    Download Restriction: Ebook Access is available upon purchase.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abdo, Hafez, 2010. "The taxation of UK oil and gas production: Why the windfalls got away," Energy Policy, Elsevier, vol. 38(10), pages 5625-5635, October.
    2. Rutledge, Ian & Wright, Philip, 1998. "Profitability and taxation in the UKCS oil and gas industry: analysing the distribution of rewards between company and country," Energy Policy, Elsevier, vol. 26(10), pages 795-812, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:wschap:9781848161030_0005. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscientific.com/page/worldscibooks .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.