The steep fall in global crude oil prices is “also a great opportunity” for countries to lower or abolish subsidies for fossil fuel consumption, the International Energy Agency has said.
Crude oil prices have fallen precipitously due to lack of demand caused by economic activity coming to a grinding halt in many countries because of the coronavirus pandemic. On Sunday, the benchmark Brent crude prices slid to $25.89 a barrel, compared with $66.15 in March 2019.
Oil subsidies, the IEA estimates, amount to $400 billion, “more than 40 per cent of them are meant to make oil products cheaper.”
The Paris-based global energy watchdog observes that while there could be acceptable reasons for governments to make energy more affordable to the poor and vulnerable people, “many subsidies are inefficiently targeted, disproportionately benefiting wealthier segments of the population that use much more of the subsidised fuel.”
