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Environment Magazine September/October 2008

 

September/October 2013

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The International Monetary Fund Confronts Global Energy Subsidies

International Monetary Fund, Energy Subsidy Reform: Lessons and Implications, Washington, DC, January 2013, pp. 68.

When was the last time your waiter's tip exceeded the cost of the meal? Such an improbable situation comes to mind as one contemplates the 10-cent-per-gallon cost of filling your car's gas tank in Venezuela—that is, a price less than the tip you may consider handing the service-station attendant. A world gasoline price averaging around $2.50 per gallon (and three times as much in countries with high motor fuel taxes) gives you a sense of how the Venezuelan government's price control means forfeiting well over $2 per gallon that could be used for economic development needs, including a long-neglected modernization of the country's oil industry itself.

Joel Darmstadter is a senior fellow at Resources for the Future, a Washington-based non-profit/non-advocacy research and policy-analysis organization specializing in natural resource and environmental issues.


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