Domestic Petroleum Product Prices and Subsidies: Recent Developments and Reform Strategies

Author/Editor:

David Coady ; Taimur Baig ; Joseph Ntamatungiro ; Amine Mati

Publication Date:

March 1, 2007

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The paper reviews recent developments in the pass-through of international to domestic petroleum product prices, in the different fuel pricing regimes, and in fuel subsidies in a range of emerging market and developing economies. The main finding of the paper is the limited price pass-through in many countries and the consequent increase in fuel subsidies. The paper proposes that key elements of a successful strategy to contain subsidies should comprise: making subsidies explicit; making pricing mechanisms more robust; combining reductions in subsidies with measures to protect the poorest; using the resulting savings well, and transparency and consultation.

Series:

Working Paper No. 2007/071

Subject:

Commodities Energy subsidies Expenditure Fuel prices Inflation Oil Oil prices Prices

English

Publication Date:

March 1, 2007

ISBN/ISSN:

9781451866353/1018-5941

Stock No:

WPIEA2007071

Pages:

24

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