Who Bears the Burden of Fuel Taxation in Latin America and the Caribbean Countries?

Publication:
Who Bears the Burden of Fuel Taxation in Latin America and the Caribbean Countries?

dc.contributor.author	World Bank
dc.date.accessioned	2025-08-15T13:54:49Z
dc.date.available	2025-08-15T13:54:49Z
dc.date.issued	2025-08-15
dc.description.abstract	This study explores the short-term welfare and distributive effects of selected fuel tax and subsidy reforms in six countries in the Latin America and Caribbean (LAC) region that are aimed at promoting the transformation of energy systems and have the potential to generate much-needed fiscal revenue. The analysis focuses on the immediate effects of higher fuel taxes (and lower subsidies) on household purchasing power in a partial equilibrium exercise. The exercise applies tools for the analysis of fiscal incidence (following the Commitment to Equity [CEQ] methodology; refer to Lustig 2022a, 2022b) that have been developed to account for the direct and indirect price effects of fuel taxes and subsidies in Brazil, Jamaica, Mexico, Paraguay, Peru, and Uruguay. The methodology consists in comparing household per capita income before and after fuel taxes and assuming that households have not yet adjusted their consumption choices. It relies on detailed household income and expenditure survey data and input-output tables for the quantification of the indirect price effects. The analysis explores the impact of taxes on various types of fossil fuels, namely, gasoline, diesel, liquefied petroleum gas (LPG), natural gas, kerosene, and ethanol. Alternative fuel tax policies are evaluated against a baseline scenario reflecting a country’s tax structure in a baseline year. In addition, the study examines how a compensation mechanism based on existing social protection programs can help partially offset these effects in each country.	en
dc.identifier	https://openknowledge.worldbank.org/entities/publication/40384c32-aa9c-4b49-adea-ab62572910a2
dc.identifier.doi	https://doi.org/10.1596/43592
dc.identifier.uri	https://hdl.handle.net/10986/43592
dc.language	English
dc.language.iso	en_US
dc.publisher	Washington, DC: World Bank
dc.rights	CC BY-NC 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	https://creativecommons.org/licenses/by-nc/3.0/igo
dc.subject	FUEL TAX
dc.subject	SUBSIDY REFORMS
dc.subject	FISCAL REVENUE
dc.subject	FOSSIL FUELS
dc.title	Who Bears the Burden of Fuel Taxation in Latin America and the Caribbean Countries?	en
dc.type	Report
dspace.entity.type	Publication
okr.date.disclosure	2025-08-15
okr.date.doiregistration	2025-08-17T02:12:48.782132Z
okr.date.lastmodified	2025-07-13T01:04:43Z	en
okr.doctype	Economic & Sector Work
okr.docurl	http://documents.worldbank.org/curated/en/099070925152540721
okr.guid	099070925152540721
okr.identifier.docmid	P180110-81e4d0ee-8c22-4cb9-82c8-9a2724db0d91
okr.identifier.externaldocumentum	40029077
okr.identifier.internaldocumentum	40029077
okr.identifier.report	203097
okr.import.id	8260
okr.imported	true	en
okr.language.supported	en
okr.pdfurl	https://documents.worldbank.org/curated/en/099070925152540721/pdf/P180110-81e4d0ee-8c22-4cb9-82c8-9a2724db0d91.pdf	en
okr.region.administrative	Latin America and Caribbean
okr.sector	FY17 - Central Government (Central Agencies)
okr.sector	Public Administration
okr.theme	FY17 - Energy,FY17 - Fiscal Policy,FY17 - Social Protection,FY17 - Climate change,FY17 - Economic Growth and Planning,FY17 - Mitigation,FY17 - Energy Policies & Reform,FY17 - Social Safety Nets,FY17 - Tax policy,FY17 - Green Growth,FY17 - Inclusive Growth
okr.theme	FY17 - Environment and Natural Resource Management,FY17 - Social Development and Protection,FY17 - Economic Policy
okr.topic	Macroeconomics and Economic Growth::Taxation & Subsidies
okr.topic	Energy::Fuels