Washington, D.C. — As global oil prices continue to tumble, countries that rely on oil exports are reforming their fossil fuel subsidy programs. The Center for American Progress has released a column looking at oil subsidy reform efforts by oil-exporting nations that are struggling to reduce the strain low global oil prices are having on their budgets.
“Oil subsidies are frequently an ineffective, wasteful, and even harmful use of public resources, which—among other consequences—distort energy markets away from cleaner alternatives and drive inefficient energy usage,” said Pete Ogden, CAP Senior Fellow and co-author of the column. “With the low cost of oil, exporters such as Qatar, Saudi Arabia, and the United Arab Emirates are now beginning to tackle this problem by slashing subsidies, joining a number of oil-importing countries who have seized the moment to cut subsidies as well.”
For the first time, nations such as Saudi Arabia, Qatar, Oman, and the United Arab Emirates are making changes to domestic subsidy programs that artificially depress the cost of gasoline. These nations have been hit hard by the low cost of oil, and their subsidy regimes are no longer sustainable as revenue sources are affected. Reforming national fossil fuel subsidies is an important step in eliminating the regressive market distortions that drive inefficient energy usage.
Click here to read the column.
For more information on this topic or to speak with an expert, contact Tom Caiazza at [email protected] or 202.481.7141.
###