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Fiscal Policy

Reforming Fuel Subsidies (RFS)

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Session No.: CE 24.05

Location: Kuwait City, Kuwait

Date: January 28, 2024 - February 1, 2024 (1 week)

Delivery Method: In-person Training

Primary Language: English

Interpretation Language: Arabic

Target Audience

Mid-level to senior officials at ministries of finance, other ministries, and government agencies involved in setting fuel prices or fuel subsidy policy. 

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Qualifications

Participants are expected to have a degree in economics or a related field. Proficiency in Microsoft Excel is desirable.

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Course Description

This course, presented by the Fiscal Affairs Department, explores recent developments in subsidy spending on fuel products, their macroeconomic impact, and the environmental and social implications. Building on country-specific case studies, the course elaborates on key elements of successful reforms, such as measures to protect low-income groups adversely affected by lower subsidies. The course also disseminates tools for measuring subsidies and assessing the distributional impact as well as alternative fuel pricing mechanisms that can help smooth the transmission of international fuel price changes to domestic prices while protecting the budget. Participants may be asked to make presentations on their own country’s experience in setting fuel prices and reforming subsidies.

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Course Objectives

Upon completion of this course, participants should be able to:

  • Explain the different rationales for energy subsidies and how subsidies are measured.
  • Describe the drawbacks of energy subsidies. Identify possible barriers to the reform of fuel subsidies. 
  • Design an effective reform strategy drawing on lessons from the experiences of other countries.
  • Use tailored tools to measure fuel subsidies and estimate the impact of a fuel subsidy reform on household welfare, in order to inform the design of mitigating measures and guide the choice of alternative fuel pricing mechanisms.
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