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Global Stock-Take of Fuel Subsidies and Pricing Policies

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  • Akcura, Elcin

Abstract

Oil price increases that began in late 2020 led to a global proliferation of liquid fuel subsidies and price controls as governments tried to reduce, redistribute, or delay the impact of rising and volatile energy prices on consumers. This paper draws on a unique database to analyze the petroleum product pricing regimes and consumer price subsidies implemented in 154 economies since 2021. The results indicate that currently a majority of countries regulate fuel prices. Of the 154 economies examined, less than half had deregulated fuel prices as of January 2025. In all, 45 percent of the economies that regulate fuel prices have frozen prices for months and, in some cases, for years. Such infrequent price adjustments, common in Sub-Saharan Africa and in the Middle East and North Africa, lead to significant market distortions, including fuel shortages, smuggling, and unsustainable subsidy costs. Pressure on governments to intervene in the fuel markets surged in 2022 following the spike in international oil prices. In response, 132 of the 154 governments studied instituted a form of fuel price control or subsidy measure in 2022: 59 governments provided direct fuel subsidies, 61 cut fuel taxes, and 41 froze fuel prices entirely. Overall, 29 governments implemented both tax reductions and price subsidies in 2022. A few countries that had deregulated fuel prices prior to 2022 ended up reregulating prices. As of January 2025, 14 countries continued to maintain the 2022 fuel tax reductions. Additionally, fuel prices remained unchanged in several countries over this period. As of January 2025, at least 16 economies were implementing subsidy reforms, while nine others were considering reforming their existing subsidies in the coming years. These economies can benefit from the lessons learned from previous episodes of rising oil prices as well as those from recent international experience, which are documented in this paper and the two new World Bank global databases developed for this study.

Suggested Citation

  • Akcura, Elcin, 2025. "Global Stock-Take of Fuel Subsidies and Pricing Policies," Policy Research Working Paper Series 11154, The World Bank.
    • Handle: RePEc:wbk:wbrwps:11154
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    References listed on IDEAS

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