Welfare and Fiscal Implications from Increased Gasoline Prices in the Islamic Republic of Iran

Atamanov, Aziz ; Mostafavi Dehzooei, Mohammadhadi ; Wai-Poi, Matthew

World Bank, Washington, DC

关键词: GASOLINE PRICE;    POVERTY;    SUBSIDIES;    FISCAL TRENDS;    INCOME ELASTICITY;   

DOI  :  10.1596/1813-9450-9235
RP-ID  :  WPS9235

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Facing a fiscal crisis, the IslamicRepublic of Iran decided to increase gasoline prices at theend of 2019. This paper estimates the impact of the priceincrease on household welfare and government revenue, usingthe most recent Household Expenditure and Income Surveyconducted by the Statistical Center of Iran in March2018-March 2019. The paper looks at the direct and indirectimpacts of the reform and quantifies the compensatory cashtransfer program the government instituted. Despite veryregressive gasoline subsidies benefitting the rich the most,the increase in gasoline prices is found to affect the poorto a greater extent due to larger negative indirect impactsas well as their relatively low incomes.In total, povertyis estimated to increase by about 2.9 percentage points,with the direct impact accounting for a third of thisincrease. The proposed government scheme, if targetedperfectly to the poorest 18 million households, would fullycompensate the poorest bottom 50 percent of the populationand reduce poverty to below pre-reform levels. The annualcost of the program will be around 338 trillion rials, whichaccounts for 77 percent of the estimated total savings fromthe subsidies reform (439 trillion rials).