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Mar 2024

Financial support for fossil fuels doubled in 2021

Source: Middle East Insurance Review | Oct 2022

Overall government support for fossil fuels in 51 countries increased from $362bn in 2020 to $697bn in 2021, according to a new analysis by Organisation for Economic Co-operation and Development (OECD) and the International Energy Agency (IEA).
 
The new analysis released in August 2022 said major economies sharply increased the support for the production and consumption of coal, oil and natural gas, with many countries struggling to balance longstanding pledges to phase out inefficient fossil fuel subsidies with efforts to protect households from surging energy prices.
 
The overall government support for fossil fuels also surged as energy prices rose with the rebound of the global economy post pandemic. In addition, consumption subsidies are anticipated to rise even further in 2022 due to higher fuel prices and energy use.
 
The current OECD and IEA combined estimates cover 51 major economies, spanning the OECD, G20 and 33 other major energy producing and consuming economies representing around 85% of the world’s total energy supply.
 
The findings also showed that in 42 economies consumer support increased to $531bn in 2021, more than triple their 2020 level, driven by the surge in energy prices.
 
Subsidies intended to support low-income households often tend to favour wealthier households that use more fuel and energy, hence, should be replaced with more targeted forms of support. M 
 
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