Skip to main content

Oil: Prices

Volume 478: debated on Monday 23 June 2008

To ask the Chancellor of the Exchequer what recent estimate he has made of the effect on global oil prices of fuel subsidies in developing countries. (213339)

HM Treasury has made no estimate of the effect of fuel subsidies in developing countries on global oil prices. Using 2005 data, the International Energy Agency has estimated that global energy consumption subsidies are likely to be in the magnitude of US$250 billion per year. As highlighted in the June 2008 Treasury paper ‘Global Commodities: a long-term vision for stable, secure and sustainable global markets’, subsidies inhibit the automatic stabilisation that should occur through changes in consumption as a result of price movements, while resulting in deterioration of Government fiscal positions.