Fossil Fuel Subsidies in Lebanon: Fiscal, Equity, Economic and Environmental Impacts

Fossil fuel subsidies in Lebanon are either in the form of direct cash transfers such as those given to Electricité Du Liban (EDL), or in the form of forgone revenues such as those resulting from a reduction in the gasoline excise rate in 2011 and the Value-Added Tax (VAT) exemption on diesel oil in 2012. This study then proposes a subsidy phasing-out roadmap over a 10-year period for both the electricity and transport sectors. The plan contains sector reforms that need to be implemented prior to the phasing-out. The fiscal, equity, economic and climate change impacts of phasing-out are then calculated and analyzed.