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Publication Details
AFRICAN RESEARCH NEXUS
SHINING A SPOTLIGHT ON AFRICAN RESEARCH
energy
The cost of domestic energy prices to Saudi Arabia
Energy Policy, Volume 39, No. 11, Year 2011
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Description
The issue of subsidies on domestic energy prices has moved up the policy agenda, most recently as a result of the G20 commitment in September 2009 to phase out such subsidies. However, what constitutes a "subsidy" is complex and controversial. The IEA in its last World Energy Outlook claimed that Saudi Arabia was second in the world in terms of its levels of subsidy on domestic energy prices. However, because Saudi Arabia is a price maker in the international oil market, the methodology used by the IEA is seriously flawed. This paper explains the problems with the methodology for computing subsidies and explains the correct method in the case of Saudi Arabia. It then attempts to measure the levels of subsidy in Saudi Arabia using this methodology. However, while it converts the IEA's "subsidy" of $23 billion into a net "profit" of $5.7 billion, it goes on to point out that the current low price regime is causing problems for Saudi Arabia. © 2011 Elsevier Ltd.
Authors & Co-Authors
Alyousef, Yousef Mohammad
Saudi Arabia, Riyadh
King Abdulaziz City for Science and Technology
Stevens, Paul
United Kingdom, London
Chatham House
Statistics
Citations: 62
Authors: 2
Affiliations: 2
Identifiers
Doi:
10.1016/j.enpol.2011.08.025
ISSN:
03014215
Research Areas
Health System And Policy