IMF urges countries to lessen energy subsidies

The International Monetary Fund (IMF) has urged countries to reduce subsidies on energy in its recent study, “Energy Subsidy Reform,” while praising the process of liberalizing petroleum sector in Turkey.
In a broad-reaching report, the IMF said subsidies of oil, petrol and electricity are aimed at helping consumers but end up costing them, as governments struggle to shoulder the financial burden.

Moreover, subsidies encourage energy waste, discourage investment in energy-efficient industries and exacerbate pollution and global warming.

Worldwide, direct subsidies on energy – when consumers pay less than the basic supply costs – amounted to $480 billion in 2011, according to the IMF. If post-tax subsidies are counted – when the prices do not cover such things as the negative impact on the environment – government support worldwide is $1.9 trillion.


/HurriyetDailynews/