Reforming Fuel Subsidies

Source details

Target Audience:
- Mid-level to senior officials at ministries of finance, other ministries, and government agencies involved in setting fuel prices or fuel subsidy policy.
Qualifications:
- Participants are expected to have a degree in economics or a related field.
- Proficiency in Microsoft Excel is desirable.

Explores recent developments in subsidy spending on fuel products, their macroeconomic impact, and the environmental and social implications.
Builds on country-specific case studies to elaborate on key elements of successful reforms, such as measures to protect low-income groups adversely affected by lower subsidies.
Disseminates tools for:
- Measuring subsidies.
- Assessing the distributional impact of fuel subsidy reforms.
- Evaluating alternative fuel pricing mechanisms that can help smooth the transmission of international fuel price changes to domestic prices while protecting the budget.
Participants may be asked to make presentations on their own country’s experience in setting fuel prices and reforming subsidies.

Explain the different rationales for energy subsidies and how subsidies are measured.
Describe the drawbacks of energy subsidies.
Identify possible barriers to the reform of fuel subsidies.
Design an effective reform strategy drawing on lessons from the experiences of other countries.
Use tailored tools to measure fuel subsidies and estimate the impact of a fuel subsidy reform on household welfare, in order to inform the design of mitigating measures and guide the choice of alternative fuel pricing mechanisms.