Saudi Arabia’s total spending on fuel subsidies soared over the past two years, hitting the highest among the Group of 20 economies on a per capita basis.
The country spent almost $7,000 per person, equivalent to about 27% of economic output, across both explicit and implicit energy subsidies, according to a paper published by the International Monetary Fund.
Fossil fuel subsidies soared globally since 2020 to $7 trillion last year as governments took measures to protect consumers and businesses from a spike in prices following Russia’s invasion of Ukraine, according to the IMF paper. It estimated that cutting fossil fuel subsidies could help reduce carbon dioxide emissions, deaths from air pollution and boost government revenues.
“Fossil fuels in most countries are priced incorrectly,” Simon Black, Antung A. Liu, Ian Parry and Nate Vernon wrote in the IMF working paper. “Unfortunately, current prices are routinely set at levels that do not adequately reflect environmental damages and, in some cases, not even supply costs.”
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