European Parliament Library

The Unequal Benefits of Fuel Subsidies :, A Review of Evidence for Developing Countries, David Coady, Javier Arze del Granado

This paper reviews evidence on the impact of fuel subsidy reform on household welfare in developing countries. On average, the burden of subsidy reform is neutrally distributed across income groups; a $0.25 decrease in the per liter subsidy results in a 6 percent decrease in income for all groups. More than half of this impact arises from the indirect impact on prices of other goods and services consumed by households. Fuel subsidies are a costly approach to protecting the poor due to substantial benefit leakage to higher income groups. In absolute terms, the top income quintile captures six times more in subsidies than the bottom. Issues that need to be addressed when undertaking subsidy reform are also discussed, including the need for a new approach to fuel pricing in many countries
Table Of Contents
Cover Page; Title Page; Copyright Page; Contents; I. Introduction; 1. International Fuel Prices, 2003-2010; II. Country Case Studies; 2. Retail Price Increases Between End-2003 and Mid-2008 in Sample Countries; 3. Pass-Through Between End-2003 and Mid-2008 in Sample Countries; III. Methodology; IV. Welfare Impacts of Fuel Price Increases; 1. Direct and Indirect Welfare Impacts of Fuel Price Increases; 2. Electricity and LPG Consumption Patterns; 3. Composition of Indirect Impact; 4. Composition of Total Impact by Consumption Quintile
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (39 p.)
Specific Material Designation
Form Of Item

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