Issues in Domestic Petroleum Pricing in Oil-Producing Countries
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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- 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.