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Domestic Petroleum Product Prices and Subsidies: Recent Developments and Reform Strategies

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Author Info
David Coady
Amine Mati
Taimur Baig
Joseph Ntamatungiro
Abstract

The paper reviews recent developments in the pass-through of international to domestic petroleum product prices, in the different fuel pricing regimes, and in fuel subsidies in a range of emerging market and developing economies. The main finding of the paper is the limited price pass-through in many countries and the consequent increase in fuel subsidies. The paper proposes that key elements of a successful strategy to contain subsidies should comprise: making subsidies explicit; making pricing mechanisms more robust; combining reductions in subsidies with measures to protect the poorest; using the resulting savings well, and transparency and consultation.

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Publisher Info
Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/71.

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Length: 24 pages
Date of creation: 02 Apr 2007
Date of revision:
Handle: RePEc:imf:imfwpa:07/71

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Related research
Keywords: Fiscal policy Oil subsidies

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  1. Kangni Kpodar & Moataz El-Said & David Coady & Paulo A. Medas & David Newhouse & Robert Gillingham, 2006. "The Magnitude and Distribution of Fuel Subsidies: Evidence from Bolivia, Ghana, Jordan, Mali, and Sri Lanka," IMF Working Papers 06/247, International Monetary Fund. [Downloadable!]
  2. Benedict J. Clements & Kevin Fletcher & Sanjeev Gupta & Gabriela Inchauste, 2002. "Issues in Domestic Petroleum Pricing in Oil-Producing Countries," IMF Working Papers 02/140, International Monetary Fund. [Downloadable!]
  3. Giulio Federico & Benedict F. W. Bingham & James Daniel, 2001. "Domestic Petroleum Price Smoothing in Developing and Transition Countries," IMF Working Papers 01/75, International Monetary Fund. [Downloadable!]
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This page was last updated on 2008-9-22.


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