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Fuel Price Subsidies in Gabon: Fiscal Cost and Distributional Impact

  • Daniel Leigh
  • Moataz El-Said
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    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.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/243.

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    Length: 15
    Date of creation: 01 Oct 2006
    Date of revision:
    Handle: RePEc:imf:imfwpa:06/243
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    1. Kangni Kpodar & David Coady & Moataz El-Said & Robert Gillingham & Paulo Medas & David Newhouse, 2006. "The Magnitude and Distribution of Fuel Subsidies: Evidence from Bolivia, Ghana, Jordan, Mali, and Sri Lanka," Post-Print hal-00130176, HAL.
    2. Robert Gillingham & David Locke Newhouse & David Coady & Kangni 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.
    3. repec:cup:cbooks:9780521397421 is not listed on IDEAS
    4. 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.
    5. 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.
    6. 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.
    7. repec:cup:cbooks:9780521265638 is not listed on IDEAS
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