{
  "title": "Chart of the Week: Oil Prices & Energy Subsidies",
  "publication": "IMF Blog, November 27, 2017",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2017/11/27/chart-of-the-week-oil-prices-energy-subsidies",
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  "summary": "Universal fuel and energy subsidies have been prevalent in sub-Saharan Africa but have substantial drawbacks: they tend to benefit the rich rather than the poor, foster fuel overconsumption, and crowd out more productive government spending.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Universal fuel and energy subsidies have been prevalent in sub-Saharan Africa but have substantial drawbacks: they tend to benefit the rich rather than the poor, foster fuel overconsumption, and crowd out more productive government spending.\n- Reforms in some mostly oil-exporting countries, along with lower international fuel prices since 2014, have reduced the size of fuel subsidies in sub-Saharan Africa, and they need to do more given the recent rise in international fuel prices.\n- Timeframe referenced: June 2014 to early 2017."
    },
    {
      "heading": "Transmission of international oil price changes",
      "content": "- An IMF survey of fuel prices in the region indicates different pass-through patterns between oil exporters and oil importers over June 2014–early 2017:\n  - Oil exporters: ratio of changes in retail fuel prices relative to changes in international fuel prices (expressed in local currency) was −19 percent, reflecting increases in domestic fuel prices despite lower international prices.\n  - Oil importers: ratio was 62 percent, indicating partial transmission of lower global oil prices to consumers (less than 100 percent pass-through)."
    },
    {
      "heading": "Domestic pricing mechanisms and observed pass-through",
      "content": "- Fuel prices in the region are mostly set by governments, either on a discretionary basis or by automatic adjustment formulas.\n- Only about one-third of sub-Saharan African countries allow automatic adjustment of retail prices; the remainder set prices administratively.\n- This pricing structure has historically translated into relatively low pass-through to changes in global oil prices."
    },
    {
      "heading": "Key elements of successful fuel and energy price reform",
      "content": "- Country experiences suggest a comprehensive strategy with these elements:\n  1. a communication campaign;\n  2. phased and gradual price increases;\n  3. targeted social spending or essential investment to mitigate the impact of the reform on affected households and firms;\n  4. introduction of an automatic pricing formula;\n  5. accompanying measures to improve the efficiency of state-owned enterprises and service delivery."
    },
    {
      "heading": "Implications",
      "content": "- Partial pass-through in oil importers (62 percent) implies consumers did not fully benefit from lower international fuel prices between June 2014 and early 2017.\n- Negative ratio for exporters (−19 percent) reflects policy moves to increase domestic fuel prices in some oil-exporting countries despite falling global prices.\n- Given the recent rise in international fuel prices, further reforms and robust mitigation measures are needed to manage subsidy costs and protect vulnerable households.\n\nSource: Chart of the Week: Oil Prices & Energy Subsidies (IMF, November 27, 2017).\n\n---\n\n Content in this bundle\n\n- 本周图表：石油价格与能源补贴, 作者：基金组织博客, 2017 年11 月.27 日\n  - 本周图表：石油价格与能源补贴, 作者：基金组织博客, 2017 年11 月.27 日 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 本周图表：石油价格与能源补贴, 作者：基金组织博客, 2017 年11 月.27 日 (PDF){rel=\"external\" type=\"application/pdf\"}\n- 今週のグラフ: 石油価格とエネルギー補助金;   IMF ブログ 2017年11月27日掲載\n  - 今週のグラフ: 石油価格とエネルギー補助金;   IMF ブログ 2017年11月27日掲載 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 今週のグラフ: 石油価格とエネルギー補助金;   IMF ブログ 2017年11月27日掲載 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Gráfico de la semana: Precios del petróleo y subsidios de la energía\n  - Gráfico de la semana: Precios del petróleo y subsidios de la energía (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Gráfico de la semana: Precios del petróleo y subsidios de la energía (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- https://www.imf.org/wp-content/uploads/2017/11/Oil-subsidies.jpg\n- subsidies\n- sub-Saharan Africa\n- https://www.imf.org/wp-content/uploads/2017/11/ENGNov14OilAfrica-4.jpg\n- Country experiences\n- Regional Economic Outlook\n\nSource: https://www.imf.org/en/blogs/articles/2017/11/27/chart-of-the-week-oil-prices-energy-subsidies"
    }
  ],
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    "Authors: The Editors",
    "Published: November 27, 2017",
    "Universal fuel and energy subsidies have been prevalent in sub-Saharan Africa but have substantial drawbacks: they tend to benefit the rich rather than the poor, foster fuel overconsumption, and crowd out more productive government spending.",
    "Reforms in some mostly oil-exporting countries, along with lower international fuel prices since 2014, have reduced the size of fuel subsidies in sub-Saharan Africa, and they need to do more given the recent rise in international fuel prices.",
    "Timeframe referenced: June 2014 to early 2017.",
    "An IMF survey of fuel prices in the region indicates different pass-through patterns between oil exporters and oil importers over June 2014–early 2017:",
    "Fuel prices in the region are mostly set by governments, either on a discretionary basis or by automatic adjustment formulas.",
    "Only about one-third of sub-Saharan African countries allow automatic adjustment of retail prices; the remainder set prices administratively.",
    "This pricing structure has historically translated into relatively low pass-through to changes in global oil prices.",
    "Country experiences suggest a comprehensive strategy with these elements:",
    "Partial pass-through in oil importers (62 percent) implies consumers did not fully benefit from lower international fuel prices between June 2014 and early 2017.",
    "Negative ratio for exporters (−19 percent) reflects policy moves to increase domestic fuel prices in some oil-exporting countries despite falling global prices.",
    "Given the recent rise in international fuel prices, further reforms and robust mitigation measures are needed to manage subsidy costs and protect vulnerable households.",
    "**本周图表：石油价格与能源补贴, 作者：基金组织博客, 2017 年11 月.27 日**",
    "**今週のグラフ: 石油価格とエネルギー補助金;   IMF ブログ 2017年11月27日掲載**",
    "**Gráfico de la semana: Precios del petróleo y subsidios de la energía**",
    "[https://www.imf.org/wp-content/uploads/2017/11/Oil-subsidies.jpg](https://www.imf.org/wp-content/uploads/2017/11/Oil-subsidies.jpg)",
    "[subsidies](https://blogs.imf.org/2015/05/18/global-energy-subsidies-are-big-about-us5-trillion-big/)",
    "[sub-Saharan Africa](http://www.imf.org/en/News/Articles/2017/10/27/na103017-sub-saharan-africa-the-path-to-recovery)",
    "[https://www.imf.org/wp-content/uploads/2017/11/ENG_Nov_14_Oil_Africa-4.jpg](https://www.imf.org/wp-content/uploads/2017/11/ENG_Nov_14_Oil_Africa-4.jpg)",
    "[Country experiences](http://www.elibrary.imf.org/page/energysubsidylessons?redirect=true)",
    "[Regional Economic Outlook](http://www.imf.org/en/Publications/REO/SSA/Issues/2017/10/19/sreo1017)"
  ],
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