Oil subsidies are changing, albeit slowly. More non-OECD nations are taking advantage of relatively stable global oil prices to chip away at expensive, but politically sensitive, retail fuel subsidies. Demand responsiveness to price changes should increase as subsidies are cut, making the oil market less prone to extended cyclical price rallies such as the one in 2003-08. Countries have to balance the benefits of phasing out subsidies against their development needs. Cheap fuel is badly targeted in terms of relieving poverty, but can spur industrial progress in the medium term.
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