Wednesday, April 3, 2013

What are pre-tax and post-tax energy subsidies?

Cheap energy, but at what cost? | Business Spectator: "How common are energy subsidies? Well, subsidies are pervasive.

Let’s start with the ‘pre-tax’ subsidies that arise when prices that consumers pay are below the supply costs of energy. Although relatively few countries have pre-tax subsidies, their magnitude is not trivial: in 2011 they amounted to some $480 billion, or 0.7 per cent of world GDP and 2 per cent of public revenues. And they are much more sizable in certain areas of the world: for example, they amounted to 8.6 per cent of GDP and 21.8 per cent of revenues in the Middle East and North Africa region."

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