How Much Would Bangladesh Gain from the Removal of Subsidies on Electricity and Natural Gas?
As in many countries around the world, subsidies to energy in Bangladesh impose a significant fiscal burden, with benefits that disproportionately accrue to high-income households. Any reforms of energy subsidies should benefit the overall economy...
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/409331545076295371/How-Much-Would-Bangladesh-Gain-from-the-Removal-of-Subsidies-on-Electricity-and-Natural-Gas http://hdl.handle.net/10986/31079 |
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okr-10986-310792022-09-08T12:17:22Z How Much Would Bangladesh Gain from the Removal of Subsidies on Electricity and Natural Gas? Timilsina, Govinda R. Pargal, Sheoli Tsigas, Marinos Sahin, Sebnem ENERGY SUBSIDIES NATURAL GAS PRICING ELASTICITY CGE MODEL ELECTRICITY ENERGY PRICE REFORM As in many countries around the world, subsidies to energy in Bangladesh impose a significant fiscal burden, with benefits that disproportionately accrue to high-income households. Any reforms of energy subsidies should benefit the overall economy rather than those who use energy the most. Using a computable general equilibrium model, this study investigates the economywide impacts of the removal of direct subsidies in the electricity sector and indirect subsidies in natural gas in Bangladesh. The study finds that removal of energy subsidies would be beneficial to the economy and would increase gross domestic product. The magnitude of the economic impact depends on how the budgetary savings from the removal of the electricity subsidies and increased revenues due to the removal of indirect subsidies to natural gas are reallocated to the economy. Recycling the savings (or the new revenues) to fund investment would benefit the country most, followed by the case of utilizing them to fund cuts in income taxes, and finally to fund cuts in indirect taxes. Although the reallocation of budgetary savings to households through lump-sum transfers is found to be inferior to the other recycling options considered, it would be the preferred option from the distributional perspective. 2018-12-28T15:52:13Z 2018-12-28T15:52:13Z 2018-12 Working Paper http://documents.worldbank.org/curated/en/409331545076295371/How-Much-Would-Bangladesh-Gain-from-the-Removal-of-Subsidies-on-Electricity-and-Natural-Gas http://hdl.handle.net/10986/31079 English Policy Research Working Paper;No. 8677 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 South Asia Bangladesh |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ENERGY SUBSIDIES NATURAL GAS PRICING ELASTICITY CGE MODEL ELECTRICITY ENERGY PRICE REFORM |
| spellingShingle |
ENERGY SUBSIDIES NATURAL GAS PRICING ELASTICITY CGE MODEL ELECTRICITY ENERGY PRICE REFORM Timilsina, Govinda R. Pargal, Sheoli Tsigas, Marinos Sahin, Sebnem How Much Would Bangladesh Gain from the Removal of Subsidies on Electricity and Natural Gas? |
| geographic_facet |
South Asia Bangladesh |
| relation |
Policy Research Working Paper;No. 8677 |
| description |
As in many countries around the world,
subsidies to energy in Bangladesh impose a significant
fiscal burden, with benefits that disproportionately accrue
to high-income households. Any reforms of energy subsidies
should benefit the overall economy rather than those who use
energy the most. Using a computable general equilibrium
model, this study investigates the economywide impacts of
the removal of direct subsidies in the electricity sector
and indirect subsidies in natural gas in Bangladesh. The
study finds that removal of energy subsidies would be
beneficial to the economy and would increase gross domestic
product. The magnitude of the economic impact depends on how
the budgetary savings from the removal of the electricity
subsidies and increased revenues due to the removal of
indirect subsidies to natural gas are reallocated to the
economy. Recycling the savings (or the new revenues) to fund
investment would benefit the country most, followed by the
case of utilizing them to fund cuts in income taxes, and
finally to fund cuts in indirect taxes. Although the
reallocation of budgetary savings to households through
lump-sum transfers is found to be inferior to the other
recycling options considered, it would be the preferred
option from the distributional perspective. |
| format |
Working Paper |
| author |
Timilsina, Govinda R. Pargal, Sheoli Tsigas, Marinos Sahin, Sebnem |
| author_facet |
Timilsina, Govinda R. Pargal, Sheoli Tsigas, Marinos Sahin, Sebnem |
| author_sort |
Timilsina, Govinda R. |
| title |
How Much Would Bangladesh Gain from the Removal of Subsidies on Electricity and Natural Gas? |
| title_short |
How Much Would Bangladesh Gain from the Removal of Subsidies on Electricity and Natural Gas? |
| title_full |
How Much Would Bangladesh Gain from the Removal of Subsidies on Electricity and Natural Gas? |
| title_fullStr |
How Much Would Bangladesh Gain from the Removal of Subsidies on Electricity and Natural Gas? |
| title_full_unstemmed |
How Much Would Bangladesh Gain from the Removal of Subsidies on Electricity and Natural Gas? |
| title_sort |
how much would bangladesh gain from the removal of subsidies on electricity and natural gas? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2018 |
| url |
http://documents.worldbank.org/curated/en/409331545076295371/How-Much-Would-Bangladesh-Gain-from-the-Removal-of-Subsidies-on-Electricity-and-Natural-Gas http://hdl.handle.net/10986/31079 |
| _version_ |
1764473556044873728 |