## If Not Now, When? Energy Price Reform in Arab Countries; April 2017 Rabat, Morocco

## Source details

**Canonical URL:** [If Not Now, When? Energy Price Reform in Arab Countries; April 2017 Rabat, Morocco](https://www.imf.org/en/publications/policy-papers/issues/2017/06/13/if-not-now-when-energy-price-reform-in-arab-countries)

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## Bibliographic details
- Published: June 13, 2017

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### Summary
- Regulating energy prices is a common practice worldwide with the general objective of facilitating access to energy products, which are central to people’s well-being and countries’ economic development.
- Energy price regulation leads to wasteful and excessive consumption, discourages investment in the energy sector, and locks in inefficient technologies.
- Low energy prices result in subsidies that erode fiscal space, while benefits for the poor are limited.
- These effects have been evident in Arab countries, where domestic energy prices are among the lowest in the world.
- The current environment of low oil prices offers a unique opportunity for change.
- Lessons from international experience suggest how well thought-out and sequenced reforms can be successful.

### Key findings
- Energy price regulation produces wasteful and excessive consumption.
- Energy price regulation discourages investment in the energy sector.
- Energy price regulation locks in inefficient technologies.
- Low domestic energy prices in Arab countries have produced subsidies that erode fiscal space.
- The distributional benefits of low energy prices for the poor are limited.
- The low oil price environment presents a timely opportunity to implement reforms.

### Policy implications and reform approach
- Pursue well thought-out and sequenced reforms, drawing on lessons from international experience.
- Use the current low oil price environment as an opportunity to adjust domestic energy pricing frameworks.
- Design reforms that address both efficiency (reducing wasteful consumption and locking in inefficient technologies) and fiscal sustainability (reducing subsidies that erode fiscal space).
- Ensure reforms consider distributional impacts, given that benefits of low energy prices for the poor are limited.

*If Not Now, When? Energy Price Reform in Arab Countries; April 2017 Rabat, Morocco, June 13, 2017*

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## Content in this bundle

- **gcc-energy-pricing-reforms**
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_Source: https://www.imf.org/en/publications/policy-papers/issues/2017/06/13/if-not-now-when-energy-price-reform-in-arab-countries_