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The Magnitude and Distribution of Fuel Subsidies: Evidence from Bolivia, Ghana, Jordan, Mali, and Sri Lanka

39 Pages Posted: 13 Nov 2006  

David P. Coady

International Monetary Fund (IMF)

Moataz El Said

International Monetary Fund (IMF) - Fiscal Affairs Department

Robert Gillingham

International Monetary Fund (IMF)

Kangni Kpodar

International Monetary Fund (IMF)

Paulo A. Medas

International Monetary Fund (IMF)

David Locke Newhouse

World Bank

Date Written: November 2006

Abstract

With the recent jump in world oil prices, the issue of petroleum product pricing has become increasingly important in developing countries. Reflecting a reluctance of many governments to pass these price increases onto energy users, energy price subsidies are absorbing an increasing share of scarce public resources. This paper identifies the issues that need to be discussed when analyzing the fiscal and social costs of fuel subsidies. Using examples from analyses recently undertaken for five countries, it also identifies the magnitude of consumer subsidies and their fiscal implications. The results of the analysis show that - in all of these countries - energy subsidies have significant social and fiscal costs and are badly targeted.

Keywords: Energy prices, subsidies, welfare distribution, household survey data

JEL Classification: C40, C67, D31, H20, I38

Suggested Citation

Coady, David P. and El Said, Moataz and Gillingham, Robert and Kpodar, Kangni and Medas, Paulo A. and Newhouse, David Locke, The Magnitude and Distribution of Fuel Subsidies: Evidence from Bolivia, Ghana, Jordan, Mali, and Sri Lanka (November 2006). IMF Working Paper No. 06/247. Available at SSRN: https://ssrn.com/abstract=944085

David P. Coady

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Moataz El Said

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Robert Gillingham

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Kangni Kpodar (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Paulo A. Medas

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

David Locke Newhouse

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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