Countries With Subsidised Gasoline
A number of countries subsidize the cost of petrol/gasoline and other petroleum products. Subsidies make transport of people and goods cheaper, but discourage fuel efficiency. In some countries, the soaring cost of crude oil since 2003 has led to these subsidies being cut, moving inflation from the government debt to the general populace, sometimes resulting in political unrest.
Fuel subsidies are common in oil-rich countries. Venezuela, which has vast oil reserves, maintains a fixed price of Bs.F 0.097 per litre (around US$0.02), and has done so since 1998, thus making it the nation with the lowest gasoline and diesel prices in the world. Other countries with subsidized fuel include Saudi Arabia, Iran, Egypt, Burma, Malaysia, Kuwait, Bahrain, Trinidad and Tobago, Brunei and Bolivia.
In February 2010, the Iranian government implemented an energy price reform by which the energy subsidies were to be removed in five years; the most important price hike was in gasoline, as the price went up from 100 rials ($0.10 US) to 400 rials ($0.40 US) per liter, with a ration of 100 liters per month for private passenger cars (later reduced to 60 liters per month).
On December 26, 2010, the Bolivian government issued a decree removing subsidies which had fixed petrol/gasoline and diesel prices for the past seven years. Arguing that illegal export (contraband) to neighboring countries was harming the economy, Bolivia eliminated the subsidies and raised gas prices as much as 83%. After widespread labor strikes, the Bolivian government canceled all planned price hikes.
Read more about this topic: Gasoline And Diesel Usage And Pricing
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