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Issues in Domestic Petroleum Pricing in Oil-Producing Countries

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Author Info

  • Sanjeev Gupta
  • Benedict J. Clements
  • Kevin Fletcher
  • Gabriela Inchauste

Abstract

This paper discusses issues relating to the domestic pricing of petroleum in oil-producing countries. It finds that in most major oil-exporting countries, government policies keep domestic prices below free-market levels, resulting in implicit subsidies that equaled 3.0 percent of GDP, on average, in 1999. Moreover, the paper argues, these petroleum subsidies are inefficient and inequitable-entailing substantial opportunity costs in terms of forgone revenue or productive spending-and also procyclical, complicating macroeconomic management. Nonetheless, the elimination of petroleum subsidies is often politically difficult, although countervailing measures and publicity campaigns can help engender support for reform.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 02/140.

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Length: 31
Date of creation: 01 Aug 2002
Date of revision:
Handle: RePEc:imf:imfwpa:02/140

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Related research

Keywords: Taxation; subsidies; subsidy; fuel oil; petroleum products; oil exporters; energy information administration; subsidization; opec; subsidizing; oil-producing countries; petroleum prices; oil subsidies; spot price; price subsidies; energy subsidies; petroleum pricing; oil importers; oil prices; oil-importing countries; oil consumption; petroleum consumption; safety nets; cash transfer program; crude oil; price subsidy; cash transfer; oil producers; petroleum exporting countries; organization of petroleum exporting countries; gasoline prices; world oil prices; crude oil prices; electricity subsidies; petroleum pipeline capacity; cash transfers; fuel taxes; gasoline consumption; fuel consumption; price of electricity; social safety net; oil export revenues; social safety nets; gas prices; oil exporting countries; petroleum sector; fuel shortages; oil demand; gasoline taxes; safety net; economic theory; fuel prices; oil companies; world market prices; petroleum market; oil price fluctuations; liquefied petroleum gas; vulnerable population; gas subsidy; oil exports; oil markets; nonrenewable resources; petroleum gas; oil producing; safety net instruments; petroleum product prices;

References

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  1. Freund, Caroline L. & Wallich, Christine I., 1995. "Raising household energy prices in Poland : who gains? who loses?," Policy Research Working Paper Series 1495, The World Bank.
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Citations

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Cited by:
  1. Daniel Artana & Fernando Navajas & Marcelo Catena, 2007. "El Shock de los Precios del Petróleo en América Central: Implicancias Fiscales y Energéticas," IDB Publications 7650, Inter-American Development Bank.
  2. David Coady & Taimur Baig & Joseph Ntamatungiro & Amine Mati, 2007. "Domestic Petroleum Product Prices and Subsidies," IMF Working Papers 07/71, International Monetary Fund.
  3. Lucas Bretschger & Simone Valente, 2013. "International Resource Tax Policies Beyond Rent Extraction," CER-ETH Economics working paper series, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich 13/185, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  4. Daniel Leigh & Moataz El-Said, 2006. "Fuel Price Subsidies in Gabon," IMF Working Papers 06/243, International Monetary Fund.
  5. Charles E. McLure, Jr., 2013. "Reforming Subsidies for Fossil Fuel Consumption: Killing Several Birds with One Stone," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper1312, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  6. Lucas Bretschger & Simone Valente, 2010. "Endogenous Growth, Asymmetric Trade and Resource Taxation," CER-ETH Economics working paper series, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich 10/132, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  7. Mehrara, Mohsen, 2007. "Energy consumption and economic growth: The case of oil exporting countries," Energy Policy, Elsevier, Elsevier, vol. 35(5), pages 2939-2945, May.
  8. Julien Daubanes & Lisa Leinert, 2012. "Optimum Tariffs and Exhaustible Resources: Theory and Evidence for Gasoline," CER-ETH Economics working paper series, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich 12/163, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  9. Wolf, C, 2008. "Does Ownership Matter? The Performance and Efficiency of State Oil vs. Private Oil (1987-2006)," Cambridge Working Papers in Economics, Faculty of Economics, University of Cambridge 0828, Faculty of Economics, University of Cambridge.
  10. Shahabuddin Mosherraf Hossain, 2003. "Taxation and Pricing of Petroleum Products in Developing Countries," IMF Working Papers 03/42, International Monetary Fund.

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