According to the IMF, fossil-fuel subsidies surged to a record $7 trillion last year. Governments supported consumers and businesses during the global spike in inflation and energy prices caused by Russia’s war with Ukraine.
Subsidies for oil, coal, and natural gas are costing nearly 7.1 percent of global GDP, exceeding what public sectors spend annually on education (4.3 percent of global income). Globally, the public sector spends 10.9 percent of its GDP on healthcare, or just a third more than said subsidies.
hydrocarbon subsidies rose by $2 trillion over the past two years to reach $7 trillion in 2022. It said that fossil fuel companies globally benefited from $13 million in subsidies per minute last year, despite being the main cause of the climate crisis.
This imposes huge environmental costs related to air pollution and damage from global warming. There were $5 trillion in environmental costs last year.
The IMF estimates that scrapping these support programs would prevent 1.6 million premature deaths annually. It would also raise government revenues by $4.4 trillion,
The IMF said these implicit subsidies are projected to grow as developing countries increase their consumption of fossil fuels toward the levels of advanced economies.
Read: Egypt cuts growth target, raises subsidies on goods and fuel
MENA fossil fuel subsidies
Fossil fuel subsidies have doubled in the Middle East and North Africa region since 2020, according to the IMF.
Total subsidies grew from $449 bn in 2020 to $776 bn two years later. Subsidies also doubled in Europe during that same time period due to subsidized natural gas and electricity.
The MENA region had the second-highest overall fossil fuel subsidies in the world, accounting for 18 percent of the world’s fossil fuel subsidies last year.
The highest was the Commonwealth of Independent States (CIS), i.e. Russia and eight former republics of the Soviet Union, with 23 percent of the total.
The East Asia and Pacific (EAP) region followed with 10%.
For more energy stories, click here.
