IMF urges to take advantage of low oil prices

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 Economy News Baghdad: The International Monetary Fund report entitled “If not now, when? Reform of energy prices in the Arab countries”, who reported that the authorities around the world “resorted to regulate energy prices in their countries in order to secure stability during periods of high volatility.”

Note, however, that such measures “led to counterproductive in some cases, as low prices of oil has encouraged excessive consumption of this commodity, and reduced the ability to invest in the energy sector, and reduced energy efficiency and production, and led to the support of the sale of oil prices to compensate for the decline, to below costs import, transport and distribution. ”

The Fund advised in his report contained in the Economic Research Unit Bulletin “Libanais” weekly, the countries of “trying to take advantage of low oil prices currently to adopt the necessary reforms in the sector, due to the convergence of domestic prices and global standards.”

He pointed out that a number of Arab countries “initiated these reforms, as oil-exporting countries raised domestic prices of the commodity.”

The report pointed out that support oil prices in oil-importing Arab countries level “fell from 4.1 percent of GDP in 2013, to 1.9 percent in 2016, coinciding with the contraction of energy subsidies level of its 6.3 percent of GDP in 2013 to 2.9 percent in 2016. ”

In exporting oil Arab countries, a decline in support for oil prices from 5.2 percent of GDP in 2013 a record 2.2 percent in 2016, and the deterioration in energy subsidies from 7 percent to 3.5 percent of GDP in the period mentioned level. ”

Fund Lebanon imported oil and class, between countries, “the least effective in the local power generation.” And monitor “the absence of any medium-term plan in the energy sector or any measures designed to protect the poor.”

He praised the adoption of Lebanon “mechanism based on market prices for the pricing of petroleum products in the country.

Unlike most imported and exported oil Arab countries, which have seen a decline in support of oil and energy prices as a percentage of output levels, the Fund pointed out that support energy prices in Lebanon, the level rose from 5.9 percent of GDP in 2013 to 6.7 percent in 2016. ”


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