"IMF Urges Phasing Out $1.9 Trillion in Global Energy Subsidies"
"Energy subsidies cost governments from the U.S. to Egypt $1.9 trillion, discourage private investment and help wealthy consumers more than the poor, according to a study by International Monetary Fund staff."
"In the report published [Wednesday] that covers 176 countries, the Washington-based IMF advocates a progressive increase in energy prices, accompanied by targeted measures to protect the poorest. Getting rid of subsidies could also help reduce carbon dioxide emissions by 13 percent, it estimated.
'Energy subsidies are large and they're harmful,' Carlo Cottarelli, the IMF's director of fiscal affairs, said on a conference call with reporters. 'They lead to excessive consumption of energy, they absorb public-sector resources that could be used for more useful purposes' and they 'benefit the rich more than the poor,' he said.
The report gives the IMF ammunition for what it describes as a 'frequent topic of discussion' with member countries. Policy makers' reluctance to let energy prices increase has stalled or derailed loans in nations such as Ukraine and Pakistan, countries the report shows spend more of their wealth on subsidies than on public health and education."
SEE ALSO:Source: Bloomberg, 03/28/2013