Reforming Fuel Pricing in an Age of $100 Oil
Increases in world oil prices since 2004 have challenged consumers and oil-importing countries across the world. Oil prices temporarily fell sharply in 2009, only to triple three years later. The oil import share of gross domestic product rose by n...
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| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2013/01/18019602/reforming-fuel-pricing-age-100-oil http://hdl.handle.net/10986/16524 |
| Summary: | Increases in world oil prices since 2004
have challenged consumers and oil-importing countries across
the world. Oil prices temporarily fell sharply in 2009, only
to triple three years later. The oil import share of gross
domestic product rose by nearly half among net oil importers
in just two years between 2009 and 2011. Governments that
control oil product prices have come under pressure to
intervene by keeping domestic prices low and effectively
subsidizing consumers. This study focuses on the evolving
role of oil in national economies, particularly those of
developing countries, and proposes a menu of options for
drawing a roadmap for pricing policy reform for oil
products. In light of events since 2009, it examines how
recent price movements have affected countries'
vulnerability to world oil price increases, how governments
have adjusted domestic fuel prices in response, the
consequences of the policy responses, other coping
mechanisms to deal with high oil prices and price
volatility, the roadblocks to reforming pricing policy, and
how to deal with them. This report suggests a menu of
options for moving away from sectoral subsidies to
market-based pricing, accompanied by an integrated social
protection program and complementary policies to reduce
consumption through efficiency improvement and fuel
diversification. Sending the right price signals and
reducing consumption can bring many benefits, ranging from
greater supply security to less congestion and pollution
from road transport. This report can help policy makers
conduct more informed national dialogues on managing fuel
pricing and the political economy around it. |
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