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The Perverse Effects of A Variable Oil Import Fee

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  • David R Henderson

Abstract

If the world oil market is at all monopolistic, then a variable import fee (VIF) has more perverse effects than a flat import fee on the country that imposes it. Like an import quota, a VIF makes the importing country's demand for oil less elastic and increases the price paid by buyers in that country. Moreover, a VIF does not necessarily yield any tariff revenue to the country that imposes it. Finally, under very plausible conditions, a VIF may facilitate price discrimination by a monopolistic foreign producer against the country that imposes it.

Suggested Citation

  • David R Henderson, 1989. "The Perverse Effects of A Variable Oil Import Fee," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 159-170.
  • Handle: RePEc:aen:journl:1989v10-04-a10
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The Problem with a Variable Tax on Gasoline, by David Henderson
      by in Econlog on 2012-03-25 15:43:54

    More about this item

    JEL classification:

    • F0 - International Economics - - General

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