Energy Subsidies Reform in Jordan : Welfare Implications of Different Scenarios

Facing a fiscal crisis, Jordan initiated substantial petroleum subsidy reforms in 2012. The government has also long contemplated how to cut electricity subsidies, which surpass the fiscal burdens imposed by the petroleum subsidies. This paper esti...

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Main Authors:	Atamanov, Aziz, Jellema, Jon, Serajuddin, Umar
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	GROWTH RATES RETAIL PRICE GOVERNMENT EXPENDITURES HEAVY OIL PRICE INCREASES KILOWATT-HOUR ELECTRICITY TARIFF INCOME INTEREST POWER STATIONS PRIVATIZATION GENERATION EXCHANGE INCOME GROUP GDP PER CAPITA ELECTRICITY SYSTEM ELASTICITY PRODUCER PRICES GASOLINE CONSUMPTION POLITICAL ECONOMY GASOLINE ENERGY PRODUCTS WORLD DEVELOPMENT INDICATORS WELFARE DISTRIBUTION PRICING GAS SUBSIDY PRICE INPUTS DISTRIBUTION OF ELECTRICITY POWER MIX INFLATION ELECTRICITY CONSUMPTION RETAIL TRENDS SAFETY NETS INTERNATIONAL COOPERATION OIL PRICES PETROLEUM SAVINGS CURRENCY OIL DEMAND ELASTICITY FOOD PRICE PRODUCTS OIL PRODUCTS OPTIONS WATER DEBT FISCAL CONSOLIDATION PRODUCER PRICE INCREASE SOCIAL PROTECTION POWER COMPANY PRICE ELASTICITY PRODUCT PRICE SUBSIDIES FUELS SUBSIDIES POWER PRODUCERS GASOLINE PRICE PRICE CHANGE EXPENDITURE PETROLEUM PRICE POLITICAL UNREST CONSUMPTION DATA AVAILABILITY SOCIAL SAFETY NETS GOVERNMENT BUDGET PETROLEUM PRICES BALANCE ELECTRIC POWER PRICE ADJUSTMENTS FUTURE MARKET PRICES POWER ELECTRICITY PRODUCER PRICE GAS SUPPLY PRICE SUPPORT DEMAND ELECTRICITY GENERATION PRICE CHANGES EXPENDITURES CONSUMERS AGRICULTURE HEAVY FUEL OIL INCOMES PETROLEUM GAS ELECTRICITY TARIFFS FUEL PRICES SALE SHARES MARKET ENERGY PRICES PRICE INCREASE PETROLEUM SECTOR SOLAR POWER OUTPUT NATURAL GAS GDP GOODS INTERNATIONAL MARKET SHARE ELECTRICITY PRICE ADVERSE IMPACT FINANCIAL RISKS TARIFF SUPPLY FUEL FUEL OIL GINI COEFFICIENT AVAILABILITY COMMUNICATION COMMODITIES PETROLEUM PRODUCTS FOOD PRICES CONSUMPTION LEVELS COMMODITY PRICES DIESEL KEROSENE PRICE OF GASOLINE COMMODITY PRODUCERS OF PETROLEUM PRICES APPROACH SPREAD ENERGY DEVELOPMENT POLICY
Online Access:	http://documents.worldbank.org/curated/en/2015/06/24649395/energy-subsidies-reform-jordan-welfare-implications-different-scenarios http://hdl.handle.net/10986/22189

id	okr-10986-22189
recordtype	oai_dc
spelling	okr-10986-221892021-04-23T14:04:07Z Energy Subsidies Reform in Jordan : Welfare Implications of Different Scenarios Atamanov, Aziz Jellema, Jon Serajuddin, Umar GROWTH RATES RETAIL PRICE GOVERNMENT EXPENDITURES HEAVY OIL PRICE INCREASES KILOWATT-HOUR ELECTRICITY TARIFF INCOME INTEREST POWER STATIONS PRIVATIZATION GENERATION EXCHANGE INCOME GROUP GDP PER CAPITA ELECTRICITY SYSTEM ELASTICITY PRODUCER PRICES GASOLINE CONSUMPTION POLITICAL ECONOMY GASOLINE ENERGY PRODUCTS WORLD DEVELOPMENT INDICATORS WELFARE DISTRIBUTION PRICING GAS SUBSIDY PRICE INPUTS DISTRIBUTION OF ELECTRICITY POWER MIX INFLATION ELECTRICITY CONSUMPTION RETAIL TRENDS SAFETY NETS INTERNATIONAL COOPERATION OIL PRICES PETROLEUM SAVINGS CURRENCY OIL DEMAND ELASTICITY FOOD PRICE PRODUCTS OIL PRODUCTS OPTIONS WATER DEBT FISCAL CONSOLIDATION PRODUCER PRICE INCREASE SOCIAL PROTECTION POWER COMPANY PRICE ELASTICITY PRODUCT PRICE SUBSIDIES FUELS SUBSIDIES POWER PRODUCERS GASOLINE PRICE PRICE CHANGE EXPENDITURE PETROLEUM PRICE POLITICAL UNREST CONSUMPTION DATA AVAILABILITY SOCIAL SAFETY NETS GOVERNMENT BUDGET PETROLEUM PRICES BALANCE ELECTRIC POWER PRICE ADJUSTMENTS FUTURE MARKET PRICES POWER ELECTRICITY PRODUCER PRICE GAS SUPPLY PRICE SUPPORT DEMAND ELECTRICITY GENERATION PRICE CHANGES EXPENDITURES CONSUMERS AGRICULTURE HEAVY FUEL OIL INCOMES PETROLEUM GAS ELECTRICITY TARIFFS FUEL PRICES SALE SHARES MARKET ENERGY PRICES PRICE INCREASE PETROLEUM SECTOR SOLAR POWER OUTPUT NATURAL GAS GDP GOODS INTERNATIONAL MARKET SHARE ELECTRICITY PRICE ADVERSE IMPACT FINANCIAL RISKS TARIFF SUPPLY FUEL FUEL OIL GINI COEFFICIENT AVAILABILITY COMMUNICATION COMMODITIES PETROLEUM PRODUCTS PRICE INCREASE FOOD PRICES CONSUMPTION LEVELS COMMODITY PRICES DIESEL KEROSENE PRICE OF GASOLINE COMMODITY PRODUCERS OF PETROLEUM PRICES APPROACH SPREAD ENERGY DEVELOPMENT POLICY Facing a fiscal crisis, Jordan initiated substantial petroleum subsidy reforms in 2012. The government has also long contemplated how to cut electricity subsidies, which surpass the fiscal burdens imposed by the petroleum subsidies. This paper estimates the impacts of the 2012 petroleum subsidies reform on household welfare and government revenues. It also simulates the distributional and fiscal impacts from ending subsidies in the electricity sector, where the pricing structure is more complex than petroleum prices. The paper looks at the direct and indirect impacts of reform. Moreover, the paper discusses the political economy considerations of reform. While the full removal of petroleum subsidies would have increased poverty, the compensatory cash transfer program the government instituted is estimated to have fully offset the negative impact for the poorer population. The impact of reforms in the electricity sector will depend significantly on the implementation method chosen. A flat increase of tariffs toward cost recovery will put a huge burden on the poorest households. However, a progressive increase in tariffs will generate substantial savings for the government, even with compensatory mechanisms to mitigate the strong negative impact on the vulnerable population. The immediate compensation of the losers from reform appears to be a crucial factor in the successful implementation of reforms in Jordan. 2015-07-16T22:14:13Z 2015-07-16T22:14:13Z 2015-06 Working Paper http://documents.worldbank.org/curated/en/2015/06/24649395/energy-subsidies-reform-jordan-welfare-implications-different-scenarios http://hdl.handle.net/10986/22189 English en_US Policy Research Working Paper;No. 7313 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Middle East and North Africa Jordan
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	GROWTH RATES RETAIL PRICE GOVERNMENT EXPENDITURES HEAVY OIL PRICE INCREASES KILOWATT-HOUR ELECTRICITY TARIFF INCOME INTEREST POWER STATIONS PRIVATIZATION GENERATION EXCHANGE INCOME GROUP GDP PER CAPITA ELECTRICITY SYSTEM ELASTICITY PRODUCER PRICES GASOLINE CONSUMPTION POLITICAL ECONOMY GASOLINE ENERGY PRODUCTS WORLD DEVELOPMENT INDICATORS WELFARE DISTRIBUTION PRICING GAS SUBSIDY PRICE INPUTS DISTRIBUTION OF ELECTRICITY POWER MIX INFLATION ELECTRICITY CONSUMPTION RETAIL TRENDS SAFETY NETS INTERNATIONAL COOPERATION OIL PRICES PETROLEUM SAVINGS CURRENCY OIL DEMAND ELASTICITY FOOD PRICE PRODUCTS OIL PRODUCTS OPTIONS WATER DEBT FISCAL CONSOLIDATION PRODUCER PRICE INCREASE SOCIAL PROTECTION POWER COMPANY PRICE ELASTICITY PRODUCT PRICE SUBSIDIES FUELS SUBSIDIES POWER PRODUCERS GASOLINE PRICE PRICE CHANGE EXPENDITURE PETROLEUM PRICE POLITICAL UNREST CONSUMPTION DATA AVAILABILITY SOCIAL SAFETY NETS GOVERNMENT BUDGET PETROLEUM PRICES BALANCE ELECTRIC POWER PRICE ADJUSTMENTS FUTURE MARKET PRICES POWER ELECTRICITY PRODUCER PRICE GAS SUPPLY PRICE SUPPORT DEMAND ELECTRICITY GENERATION PRICE CHANGES EXPENDITURES CONSUMERS AGRICULTURE HEAVY FUEL OIL INCOMES PETROLEUM GAS ELECTRICITY TARIFFS FUEL PRICES SALE SHARES MARKET ENERGY PRICES PRICE INCREASE PETROLEUM SECTOR SOLAR POWER OUTPUT NATURAL GAS GDP GOODS INTERNATIONAL MARKET SHARE ELECTRICITY PRICE ADVERSE IMPACT FINANCIAL RISKS TARIFF SUPPLY FUEL FUEL OIL GINI COEFFICIENT AVAILABILITY COMMUNICATION COMMODITIES PETROLEUM PRODUCTS PRICE INCREASE FOOD PRICES CONSUMPTION LEVELS COMMODITY PRICES DIESEL KEROSENE PRICE OF GASOLINE COMMODITY PRODUCERS OF PETROLEUM PRICES APPROACH SPREAD ENERGY DEVELOPMENT POLICY
spellingShingle	GROWTH RATES RETAIL PRICE GOVERNMENT EXPENDITURES HEAVY OIL PRICE INCREASES KILOWATT-HOUR ELECTRICITY TARIFF INCOME INTEREST POWER STATIONS PRIVATIZATION GENERATION EXCHANGE INCOME GROUP GDP PER CAPITA ELECTRICITY SYSTEM ELASTICITY PRODUCER PRICES GASOLINE CONSUMPTION POLITICAL ECONOMY GASOLINE ENERGY PRODUCTS WORLD DEVELOPMENT INDICATORS WELFARE DISTRIBUTION PRICING GAS SUBSIDY PRICE INPUTS DISTRIBUTION OF ELECTRICITY POWER MIX INFLATION ELECTRICITY CONSUMPTION RETAIL TRENDS SAFETY NETS INTERNATIONAL COOPERATION OIL PRICES PETROLEUM SAVINGS CURRENCY OIL DEMAND ELASTICITY FOOD PRICE PRODUCTS OIL PRODUCTS OPTIONS WATER DEBT FISCAL CONSOLIDATION PRODUCER PRICE INCREASE SOCIAL PROTECTION POWER COMPANY PRICE ELASTICITY PRODUCT PRICE SUBSIDIES FUELS SUBSIDIES POWER PRODUCERS GASOLINE PRICE PRICE CHANGE EXPENDITURE PETROLEUM PRICE POLITICAL UNREST CONSUMPTION DATA AVAILABILITY SOCIAL SAFETY NETS GOVERNMENT BUDGET PETROLEUM PRICES BALANCE ELECTRIC POWER PRICE ADJUSTMENTS FUTURE MARKET PRICES POWER ELECTRICITY PRODUCER PRICE GAS SUPPLY PRICE SUPPORT DEMAND ELECTRICITY GENERATION PRICE CHANGES EXPENDITURES CONSUMERS AGRICULTURE HEAVY FUEL OIL INCOMES PETROLEUM GAS ELECTRICITY TARIFFS FUEL PRICES SALE SHARES MARKET ENERGY PRICES PRICE INCREASE PETROLEUM SECTOR SOLAR POWER OUTPUT NATURAL GAS GDP GOODS INTERNATIONAL MARKET SHARE ELECTRICITY PRICE ADVERSE IMPACT FINANCIAL RISKS TARIFF SUPPLY FUEL FUEL OIL GINI COEFFICIENT AVAILABILITY COMMUNICATION COMMODITIES PETROLEUM PRODUCTS PRICE INCREASE FOOD PRICES CONSUMPTION LEVELS COMMODITY PRICES DIESEL KEROSENE PRICE OF GASOLINE COMMODITY PRODUCERS OF PETROLEUM PRICES APPROACH SPREAD ENERGY DEVELOPMENT POLICY Atamanov, Aziz Jellema, Jon Serajuddin, Umar Energy Subsidies Reform in Jordan : Welfare Implications of Different Scenarios
geographic_facet	Middle East and North Africa Jordan
relation	Policy Research Working Paper;No. 7313
description	Facing a fiscal crisis, Jordan initiated substantial petroleum subsidy reforms in 2012. The government has also long contemplated how to cut electricity subsidies, which surpass the fiscal burdens imposed by the petroleum subsidies. This paper estimates the impacts of the 2012 petroleum subsidies reform on household welfare and government revenues. It also simulates the distributional and fiscal impacts from ending subsidies in the electricity sector, where the pricing structure is more complex than petroleum prices. The paper looks at the direct and indirect impacts of reform. Moreover, the paper discusses the political economy considerations of reform. While the full removal of petroleum subsidies would have increased poverty, the compensatory cash transfer program the government instituted is estimated to have fully offset the negative impact for the poorer population. The impact of reforms in the electricity sector will depend significantly on the implementation method chosen. A flat increase of tariffs toward cost recovery will put a huge burden on the poorest households. However, a progressive increase in tariffs will generate substantial savings for the government, even with compensatory mechanisms to mitigate the strong negative impact on the vulnerable population. The immediate compensation of the losers from reform appears to be a crucial factor in the successful implementation of reforms in Jordan.
format	Working Paper
author	Atamanov, Aziz Jellema, Jon Serajuddin, Umar
author_facet	Atamanov, Aziz Jellema, Jon Serajuddin, Umar
author_sort	Atamanov, Aziz
title	Energy Subsidies Reform in Jordan : Welfare Implications of Different Scenarios
title_short	Energy Subsidies Reform in Jordan : Welfare Implications of Different Scenarios
title_full	Energy Subsidies Reform in Jordan : Welfare Implications of Different Scenarios
title_fullStr	Energy Subsidies Reform in Jordan : Welfare Implications of Different Scenarios
title_full_unstemmed	Energy Subsidies Reform in Jordan : Welfare Implications of Different Scenarios
title_sort	energy subsidies reform in jordan : welfare implications of different scenarios
publisher	World Bank, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2015/06/24649395/energy-subsidies-reform-jordan-welfare-implications-different-scenarios http://hdl.handle.net/10986/22189
_version_	1764450384845209600

Energy Subsidies Reform in Jordan : Welfare Implications of Different Scenarios

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