Global energy subsidies to reach $5.3 trillion, KSA 4th
New study released figures that are more than double the IMF’s subsidy analysis in 2011
Global energy subsidies are projected to reach $5.3 trillion in 2015, nearly 6.5 percent of the global GDP, according to a recent study by the International Monetary Fund (IMF).
The new data is more than double the IMF’s own post-tax subsidy analysis just a few years ago.
In Saudi Arabia, a citizen and expatriate’s per capita share of energy totals $3395 annually, meaning the country ranks fourth globally for energy subsidies per capita out of 135 countries.
The population in Saudi Arabia totals 31 million people meaning the government’s total energy subsidies are close to $105 bln per annum. This figure equals nearly 14 percent of the local total production levels, and equals to 29 percent of the Gulf Arab Kingdom’s income from oil.
The IMF says such high numbers of energy subsidies cause massive financial losses that could have gone to the global fund. They added that “most of this arises from countries setting energy taxes below levels that fully reflect the environmental damage associated with energy consumption.”
“The bulk of energy subsidies in most countries are due to undercharging for domestic environmental damage, including local air pollution - especially in countries with high coal use and high population exposure to emissions - and broader externalizes from vehicle use like traffic congestion and accidents. In many top subsidizers in percent of GDP and in per capita terms, these also reflect the setting of domestic energy prices below their supply cost,” the IMF report said.
From its end, Saudi Arabia has said it would shortly review the ways in which the government provides and subsidizes for energy, especially in light of growing domestic consumption levels.
And in a move begun by Saudi Arabia, policies are being amended to allow more efficient use of energy and to reduce the levels of waste consumption.
The kingdom has also said it would review current energy subsidies after the United Arab Emirates (UAE) began lift subsidies on gasoline and diesel prices earlier this month, in a move aimed to liberalize prices and link them to international prices.