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Price shields: subsidies for fossil fuels explode in 2022

THE FIGURE OF THE WEEK. A study by the IMF estimates that 1,300 billion dollars of direct financial aid paid out to protect their population against soaring energy prices.


Significant aid has been granted around the world to cope with soaring energy prices in 2022.
© MATHIEU THOMASSET / Hans Lucas / Hans Lucas via AFP

Sccording to a study by the International Monetary Fund (IMF) conducted in 170 countries, direct public subsidies to fossil fuels reached a record level of 1,300 billion dollars in 2022, compared to only 500 billion dollars in 2020. energy prices caused by the war in Ukraine, governments have tried to protect the purchasing power of their population by introducing price shields.

These have enabled consumers to benefit from prices for petrol, fuel oil, gas and even electricity that are significantly lower than their price set by the market. State financial aid for households accounted for 97% of subsidies, those intended for fossil fuel producers 3%. In detail, according to the calculations of IMF economists, they were devoted up to 48% to natural gas, 26% to oil, 25% to electricity and 1% to coal.

China, Saudi Arabia, South Korea…

Direct subsidies to fossil fuels accounted for 1.3% of global GDP in 2022, compared to 0.6% in 2020. Geographically, the East Asia and Pacific region hosted 38%, the Middle East and North Africa 26%, Europe 16%, while Africa and North America were each below 3%.

READ ALSOFuels: will the rise in prices at the pump stop? In absolute terms, financial aid was highest in China ($270 billion), ahead of Saudi Arabia ($129 billion) and South Korea ($65 billion). They also reached 43 billion dollars in Germany and 18 billion in France but they were limited to only 3 billion dollars in the United States. Reported to each inhabitant, direct public subsidies to fossil fuels represented in 2022 3,579 dollars in Saudi Arabia, 1,250 dollars in South Korea, 520 dollars in Germany, 278 dollars in France and 9 dollars in the United States.

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