Fossil Fuel Subsidy and Pricing Policies : Recent Developing Country Experience

The steep decline in the world oil price in the last quarter of 2014 slashed fuel price subsidies. Several governments responded by announcing that they would remove subsidies for one or more fuels and move to market-based pricing with full cost recovery. Other governments took advantage of low world prices to increase taxes and other charges on fuels. However, the decision to move to cost recovery and market prices, ending budgetary support, has not been implemented consistently across countries. Policy announcements have varied in the way they were communicated and the level of detail provided. When petroleum product prices bounced back during the first half of 2015, some reforming governments failed to raise prices correspondingly. Recent experience suggests that regular and frequent price adjustments, however small—as in Jordan and Morocco—help the government and consumers to get accustomed to fluctuations in world fuel prices and exchange rates. By contrast, freezing prices, even for a few months—for socioeconomic considerations or because the needed adjustments are small enough to be absorbed—increases the risk of reversion to ad hoc pricing and price subsidies. The more formally the decision to move to market-based pricing is communicated, the more public new price announcements, and the higher the frequency of price changes, the more likely the implementation of the announced pricing policy reform will be sustained.

Bibliographic Details

Main Author:	Kojima, Masami
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2016-01
Subjects:	FUEL SHORTAGE, SPOT PRICE, FUEL SPECIFICATIONS, POWER PLANTS, REFINED PRODUCTS, FOSSIL FUELS, CARBON DIOXIDE, DOMESTIC GAS, RESIDENTIAL CONSUMERS, REFINERY OPERATIONS, ELECTRICITY TARIFF, ENERGY PRICING, HEAT METERS, POWER PRICES, GENERATION, COST OF ELECTRICITY, GASOLINE, GAS IMPORTS, ENERGY PRODUCTS, ETHANOL, EFFICIENCY IMPROVEMENT, PRICE, VOLTAGE, POWER SYSTEM, DOMESTIC NATURAL GAS PRODUCTION, POWER GENERATION PLANT, AVIATION FUEL, LNG, OIL PRICES, PETROLEUM, AIR POLLUTION, OIL, BIOMASS RESOURCES, KEROSENE SUBSIDIES, GAS DEVELOPMENT, OIL COMPANIES, FUEL USE, DOMESTIC SUPPLY, ELECTRIFICATION, POWER GENERATORS, DISTRIBUTION FACILITIES, FUEL PRODUCTS, ALTERNATIVE FUELS, OIL IMPORTS, POWER COMPANY, FUELS, FUEL SWITCHING, FUEL COSTS, ELECTRICITY PRODUCERS, FUEL SUPPLY, GAS COMPANIES, COAL MINING, MINERAL RESOURCES, GAS PROCESSING PLANTS, BALANCE, ELECTRIC POWER, ELECTRICITY, CEMENT, PRICE OF OIL, HYDROPOWER, FUEL BILLS, EVAPORATIVE EMISSIONS, ELECTRICITY GENERATION, FOSSIL FUEL, OIL EXPORTS, POWER_SECTOR, PETROLEUM GAS, IMPORTS OF PETROLEUM, FUEL PRICES, VALUE OF ENERGY, ENERGY USE, NET OIL, SULFUR FUEL OIL, TARIFF LEVELS, PETROLEUM SECTOR, FOSSIL FUEL CONSUMPTION, AUTOMOTIVE FUELS, PETROLEUM DIESEL, ENERGY OUTLOOK, OIL REFINERY, TAX REBATE, COAL, DIESEL FUEL, FUEL, CRUDE OIL, FACILITIES, HYDROPOWER GENERATION, SULFUR CONTENT, GAS METERS, PETROLEUM PRODUCTS, OIL EXPORTER, DIESEL, KEROSENE, OIL COST, OIL INDUSTRY, BACKUP POWER, PIPELINE, APPROACH, EMPLOYMENT, LIQUID FUEL, KILOWATT‐HOUR, POWER SECTORS, PUBLIC UTILITIES, OIL PRICE, TAX EXEMPTION, CEMENT PRODUCTION, GAS TURBINES, DISTRICT HEATING, VEHICLES, ACTIVITIES, OIL COMPANY, OIL OUTPUT, WIND, CLEAN ENERGY, EMISSIONS, GAS PRICES, GAS PRICE, DOMESTIC NATURAL GAS, LIQUID FUELS, CARBON DIOXIDE EMISSIONS, COAL COMPANY, GAS FIELDS, OIL PRICE COLLAPSE, GAS, WHOLESALE PRICE, BARRELS PER DAY, POLLUTANT EMISSIONS, DOMESTIC OIL, OIL CONSUMPTION, OIL PRODUCTION, GAS CONSUMPTION, SAFETY REGULATIONS, TRANSPORTATION FUEL, DISTRICT‐HEATING, ELECTRICITY CONSUMPTION, RESIDUAL FUEL, BIOMASS, GENERATION CAPACITY, OILS, NATURAL GAS PRICES, POWER GENERATION, NATURAL GAS PRODUCTION, PRICES OF FUELS, POWER SECTOR, GAS PRODUCTION, OPTIONS, WATER, SOLID FUELS, ELECTRICITY SUPPLY, POLLUTION, GROSS DOMESTIC PRODUCT, FUEL CONSUMPTION, GAS‐CONSUMPTION, GASOLINE PRICES, REGULAR GASOLINE, SULFUR, POWER PRODUCERS, GASOLINE PRICE, PETROLEUM PRICE, BORDER TRADE, ENERGY CONSUMPTION, POWER GENERATION CAPACITY, TAX RATE, HEAT, FUEL TYPES, WHOLESALE PRICES, COST OF GAS, UTILITIES, HEAT METERING, POWER, GAS SUPPLY, GAS SUPPLIES, HEAVY FUEL OIL, ELECTRICITY TARIFFS, COAL‐MINING, OIL PRODUCERS, ENERGY BILLS, DOMESTIC CRUDE OIL, UTILITY BILLS, RESIDUAL FUEL OIL, ENERGY PRICES, HYDROCARBONS, TURBINES, TAX REVENUE, ENERGY EFFICIENCY, ELECTRICITY PRICES, DIESEL FUEL PRICES, CRUDE OIL PRICE, NATURAL GAS, TAX CREDITS, HEAT TARIFF, GAS INDUSTRY, PRICE OF GAS, FEEDSTOCK, OIL EXPORTERS, INVESTMENT, TRANSPORTATION FUELS, TARIFF, FUEL OIL, AVAILABILITY, RURAL ELECTRIFICATION, INVESTMENTS, ETHANOL IN GASOLINE, CYCLE POWER GENERATION PLANT, HEAVY RELIANCE, RENEWABLE ENERGY, NATURAL GAS CONSUMPTION, PRICE OF GASOLINE, FOSSIL, GRID ELECTRICITY, PRICES, GAS EXPLORATION, ENERGY,
Online Access:	http://documents.worldbank.org/curated/en/2016/01/25762644/fossil-fuel-subsidy-pricing-policies-recent-developing-country-experience http://hdl.handle.net/10986/23631
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