## Issues in Domestic Petroleum Pricing in Oil-Producing Countries

_IMF Working Papers, August 1, 2002_

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## Bibliographic details
- Authors: Sanjeev Gupta, Benedict J. Clements, Kevin Fletcher, Gabriela Inchauste
- Published: August 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451856132.001

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### Summary findings
- Government policies in most major oil-exporting countries keep domestic petroleum prices below free-market levels.
- Implicit petroleum subsidies equaled 3.0 percent of GDP, on average, in 1999.
- Petroleum subsidies are characterized as inefficient and inequitable.
- Subsidies entail substantial opportunity costs in terms of forgone revenue or productive spending.
- Petroleum subsidies are procyclical and complicate macroeconomic management.
- Elimination of petroleum subsidies is often politically difficult.

### Analysis and implications
- Distributional and efficiency concerns:
  - Subsidies are inefficient and inequitable, implying misallocation of resources and adverse distributional outcomes.
- Macroeconomic management:
  - Procyclical nature of subsidies complicates macroeconomic policy and stabilization efforts.
- Fiscal cost:
  - Implicit subsidies represented a significant fiscal burden (3.0 percent of GDP, on average, in 1999).

### Policy recommendations and reform considerations
- Subsidy reform is recommended to reduce inefficiency, inequity, and macroeconomic complications.
- Recognize political economy constraints:
  - Elimination of petroleum subsidies is often politically difficult.
- Measures to facilitate reform:
  - Countervailing measures and publicity campaigns can help engender support for reform.

### Publication and metadata
- Title: Issues in Domestic Petroleum Pricing in Oil-Producing Countries
- Authors: Sanjeev Gupta, Benedict J. Clements, Kevin Fletcher, Gabriela Inchauste
- Publication date: August 1, 2002
- Series: Working Paper No. 2002/140
- Issue: 140
- Volume: 2002
- Pages: 31
- DOI: https://doi.org/10.5089/9781451856132.001
- ISBN: 9781451856132
- ISSN: 1018-5941
- Subjects: Commodities, Consumption, Energy subsidies, Expenditure, Fuel prices, National accounts, Oil, Oil prices, Prices
- Keywords: Consumption, country, domestic prices, Energy subsidies, excises, fiscal policy, free market price, Fuel prices, Global, government, incidence, max-min price stabilization law, Oil, Oil prices, petroleum, petroleum product price, price, reference price, subsidies, subsidy, subsidy reform, transfer program, world oil prices increase, WP

*IMF Working Paper — Views expressed are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/issues-in-domestic-petroleum-pricing-in-oil-producing-countries-15963_