Issues in Domestic Petroleum Pricing in Oil-Producing Countries
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Summary:
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.
Series:
Working Paper No. 2002/140
Subject:
Commodities Consumption Energy subsidies Expenditure Fuel prices National accounts Oil Oil prices Prices
English
Publication Date:
August 1, 2002
ISBN/ISSN:
9781451856132/1018-5941
Stock No:
WPIEA1402002
Pages:
31
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