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Fuel Price Subsidies in Gabon: Fiscal Cost and Distributional Impact

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  • Mr. Daniel Leigh
  • Moataz El-Said

Abstract

This paper looks at the fiscal cost and distributional impact of implicit fuel price subsidies in Gabon, where fuel prices have remained largely unchanged since 2002. Using estimated implicit import parity prices, we evaluate the total fiscal cost of the subsidies at 3.2 percent of non-oil GDP in 2005-more than total public health expenditures. We also analyze the distribution of the subsidies using household survey data and find that the bulk of the subsidies benefit higher-income households. Finally, we suggest use of a number of existing programs to provide a more targeted and cost-effective means of protecting the real incomes of lower-income households from the effects of energy price increases.

Suggested Citation

  • Mr. Daniel Leigh & Moataz El-Said, 2006. "Fuel Price Subsidies in Gabon: Fiscal Cost and Distributional Impact," IMF Working Papers 2006/243, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2006/243
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    References listed on IDEAS

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    Cited by:

    1. Jiang, Zhujun & Tan, Jijun, 2013. "How the removal of energy subsidy affects general price in China: A study based on input–output model," Energy Policy, Elsevier, vol. 63(C), pages 599-606.
    2. Ilyas, Rubina & Hussain, Khadim & Ullah, Mehreen Zaid & Xue, Jianhong, 2022. "Distributional impact of phasing out residential electricity subsidies on household welfare," Energy Policy, Elsevier, vol. 163(C).
    3. Plante, Michael, 2011. "The long-run macroeconomic impacts of fuel subsidies in an oil-importing developing country," MPRA Paper 33823, University Library of Munich, Germany.
    4. Jiang, Zhujun & Ouyang, Xiaoling & Huang, Guangxiao, 2015. "The distributional impacts of removing energy subsidies in China," China Economic Review, Elsevier, vol. 33(C), pages 111-122.
    5. Hertog, Steffen, 2017. "Making wealth sharing more efficient in high-rent countries: the citizens’ income," LSE Research Online Documents on Economics 101305, London School of Economics and Political Science, LSE Library.
    6. Siddig, Khalid & Aguiar, Angel & Grethe, Harald & Minor, Peter & Walmsley, Terrie, 2014. "Impacts of removing fuel import subsidies in Nigeria on poverty," Energy Policy, Elsevier, vol. 69(C), pages 165-178.
    7. Hakim, Roslan & Abdullah, Othman Yeop & Ismail, Russayani binti & Abdul Razak, Nor Azam, 2014. "Fuel Subsidy Rationalisation: The Perils of the Middle Class in Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 48(2), pages 83-97.
    8. Jakob Skovgaard, 2017. "The devil lies in the definition: competing approaches to fossil fuel subsidies at the IMF and the OECD," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(3), pages 341-353, June.
    9. Zhan-Ming Chen, 2017. "Inventory and Distribution of Energy Subsidies of China," The Energy Journal, International Association for Energy Economics, vol. 0(KAPSARC S).
    10. Soile, Ismail & Mu, Xiaoyi, 2015. "Who benefit most from fuel subsidies? Evidence from Nigeria," Energy Policy, Elsevier, vol. 87(C), pages 314-324.
    11. Siddig,Khalid & Minor,Peter J. & Grethe,Harald & Aguiar,Angel & Walmsley,Terrie Louise, 2015. "Impacts on poverty of removing fuel import subsidies in Nigeria," Policy Research Working Paper Series 7376, The World Bank.

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    Keywords

    WP; price; fuel price subsidy; Gabon; GDP;
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