| Summary: | The oil price decline creates an opportunity to dismantle energy subsidies, which escalatedwith high oil prices. This paper assesses energy subsidies in Latin America and theCaribbean-about 1.8 percent of GDP in 2011-13 (approximately evenly split betweenfuel and electricity), and about 3.8 percent of GDP including negative externalities. Countries with poorer institutions subsidize more. Energy-rich countries subsidize fuelmore, but low-income countries are more likely to subsidize electricity, as are CentralAmerica and the Caribbean. Energy subsidies impose fiscal costs, hurting SOEs, competit.
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