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

Author

Listed:
  • Mr. David Coady
  • Mr. Taimur Baig
  • Mr. Joseph Ntamatungiro
  • Mr. Amine Mati

Abstract

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.

Suggested Citation

  • Mr. David Coady & Mr. Taimur Baig & Mr. Joseph Ntamatungiro & Mr. Amine Mati, 2007. "Domestic Petroleum Product Prices and Subsidies: Recent Developments and Reform Strategies," IMF Working Papers 2007/071, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/071
    as

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    References listed on IDEAS

    as
    1. Mr. Robert Gillingham & David Locke Newhouse & Mr. David Coady & Mr. Kangni R Kpodar & Moataz El-Said & Mr. Paulo A Medas, 2006. "The Magnitude and Distribution of Fuel Subsidies: Evidence from Bolivia, Ghana, Jordan, Mali, and Sri Lanka," IMF Working Papers 2006/247, International Monetary Fund.
    2. Mr. Sanjeev Gupta & Mr. Benedict J. Clements & Mr. Kevin Fletcher & Ms. Gabriela Inchauste, 2002. "Issues in Domestic Petroleum Pricing in Oil-Producing Countries," IMF Working Papers 2002/140, International Monetary Fund.
    3. Mr. Benedict F. W. Bingham & Mr. James Daniel & Mr. Giulio Federico, 2001. "Domestic Petroleum Price Smoothing in Developing and Transition Countries," IMF Working Papers 2001/075, International Monetary Fund.
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