Energy subsidies in developing countries: Treating the disease while symptoms abate
Energy subsidies in developing countries: Treating the disease while symptoms abate / David Coady & Baoping Shang, Vox, 13/01/2015
http://www.voxeu.org/article/energy-subsidies-developing-countries
The adverse effects of energy subsidies have been widely documented. While recent decreases in international oil prices have provided a welcome respite, past experience has highlighted the need for caution. This column argues that to make this respite a permanent gain will require the removal of government discretion in determining domestic energy prices. Adoption of an automatic energy pricing mechanism, possibly with in-built short-term price smoothing, can help prevent the return of subsidies and prepare the way for eventual price deregulation…