In 2020, the fall in fossil fuel prices and energy use brought the value of fossil fuel consumption subsidies down to a record low – the estimate of just over USD 180 billion is some 40% down from 2019 levels. This is the lowest annual figure since we started tracking these subsidies in 2007. Almost all countries had lower estimated subsidies year-on-year; Iran remains the single largest provider of these subsidies, although the value of the implicit support to domestic consumers fell by more than USD 50 billion in 2020, due to low crude prices and weak economic conditions. One of the very few categories where our subsidy estimate grew year-on-year was oil products in China (notably for residential use), reflecting a relatively rapid recovery from the pandemic. Overall, the weighted-average subsidy rate was some 10% - meaning that consumers receiving these subsidies paid on average around 90% of the competitive market reference prices for the energy products concerned.
Among the fuels, subsidies to oil products remained the largest single component of the total (USD 90 billion out of the total USD 180 billion). Subsidies for residential consumption of oil products overtook those for transport fuels, which fell by half because of lower demand for mobility during lockdowns and the economic slump. Subsidies to fossil fuels used to produce electricity are the next-largest element of the overall subsidy estimate (USD 50 billion in 2020), followed by natural gas (USD 35 billion) and coal (USD 1.7 billion).
The following chart shows the value of fossil-fuel subsidies by fuel in the top 25 countries in 2020: