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Fuel Price Subsidies in Gabon; Fiscal Cost and Distributional Impact

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  • 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

  • Daniel Leigh & Moataz El-Said, 2006. "Fuel Price Subsidies in Gabon; Fiscal Cost and Distributional Impact," IMF Working Papers 06/243, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:06/243
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    References listed on IDEAS

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    1. David Coady & Margaret Grosh & John Hoddinott, 2004. "Targeting of Transfers in Developing Countries : Review of Lessons and Experience," World Bank Publications, The World Bank, number 14902.
    2. Ahmad, Ehtisham & Stern, Nicholas, 1984. "The theory of reform and indian indirect taxes," Journal of Public Economics, Elsevier, vol. 25(3), pages 259-298, December.
    3. Sanjeev Gupta & Benedict J. Clements & Kevin Fletcher & Gabriela Inchauste, 2002. "Issues in Domestic Petroleum Pricing in Oil-Producing Countries," IMF Working Papers 02/140, International Monetary Fund.
    4. Robert Gillingham & David Locke Newhouse & David Coady & Kangni R Kpodar & Moataz El-Said & Paulo A Medas, 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.
    5. Ahmad,Etisham & Stern,Nicholas, 1991. "The Theory and Practice of Tax Reform in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521265638, May.
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    Citations

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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. 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.
    3. 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.
    4. 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.
    5. repec:spr:ieaple:v:17:y:2017:i:3:d:10.1007_s10784-017-9355-z is not listed on IDEAS
    6. Soile, Ismail & Mu, Xiaoyi, 2015. "Who benefit most from fuel subsidies? Evidence from Nigeria," Energy Policy, Elsevier, vol. 87(C), pages 314-324.

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