The fuel subsidies conundrum

The burden of subsidies on national economies seems to outweigh their political point scoring benefits, but removing them is not an easy task

Fuel subsidies are used in many countries, especially oil-producing ones, as a means to lower the costs of consumption and, in some cases, production. These subsidies often have implications for national economies, social equality and environmental sustainability. The IMF estimated global subsidy costs at around $7t in 2022, with fuel subsidies estimated at $1t. While total global subsidies are likely to increase to more than $8t by the end of this decade, there is an overall realisation that getting rid of fuel subsidies, especially, could help balance budgets, enhance prosperity and reduce pollution by reducing reliance on fossil fuels. Fuel subsidies have been used by governments to maint