Top 10 Nations Burning Trillions of Dollars on Fuel Subsidies For The Benefit of Their Citizens

Countries with high fuel subsidies include China, the US, Russia, India, and Japan, with China and the US providing the largest total amounts in recent years. However, subsidies are widespread globally, with over 40 countries using consumption-based subsidies to keep fuel prices low for their citizens, particularly in the Asia-Pacific region and among fossil fuel-producing nations like Saudi Arabia and Algeria. 

Countries with the highest overall fuel subsidies

The countries providing the largest total amounts of fossil fuel subsidies include: 

• China:Contributed the most globally, with over $2.2 trillion in 2022.
• United States:Spent $757 billion in 2022.
• Russia:Spent $421 billion in 2022.
• India:Spent $346 billion in 2022.
• Japan:Spent $310 billion in 2022.

Other countries with notable fuel subsidies

• Saudi Arabia and other fossil fuel producers:Many countries that are large fossil fuel producers, such as Saudi Arabia, Turkmenistan, Libya, and Algeria, provide significant subsidies to support production and lower consumer prices.
• Indonesia and other Asia-Pacific nations:Indonesia and other countries in the Asia-Pacific region also have fuel subsidy programs.
• Germany:Had the highest fossil fuel subsidies among G7 members in 2023.

Why subsidies are used

• Lower consumer prices:Subsidies cap the price citizens pay for gasoline and other fuels, making energy more affordable.
• Support to state-owned companies:Governments may compensate state energy companies for losses incurred due to price caps.
• Tax deductions:In some countries, like the United States, oil companies can receive tax benefits for their drilling costs, which functions as a type of subsidy.

Global trends

• Widespread use:Fossil fuel consumption subsidies are in place in over 40 countries, according to the International Energy Agency (IEA).
• Historical context:Global fossil fuel subsidies surged to a record $7 trillion in 2022, an increase from previous years.

An article in FDI Intelligence outlines how global fossil fuel subsidies have surged in recent years, as many governments continue to keep domestic fuel prices artificially low despite the environmental and fiscal costs. According to IMF data cited in the piece, total fuel subsidies in 2022 reached ~US$7 trillion, about 7.1% of global GDP, marking an 18.3% increase from the previous year. 

A large share of these subsidies are implicit rather than explicit: roughly 82% of the total reflects retail prices that fail to internalize environmental damage or consumption taxes. The remaining minority consists of direct (explicit) subsidies, where supply costs are undercharged. 

In absolute terms, China dominates the global subsidy landscape, contributing over US$2.2 trillion in 2022. Other top contributors include the U.S. (US$757 billion), Russia (US$421 billion), India (US$346 billion), and Japan (US$310 billion). 

Qatar stands out

When viewed on a per capita basis, Qatar stands out — it subsidized fuel at over US$14,100 per person, largely via natural gas subsidies, equivalent to about 19% of its GDP.  Other Gulf states—such as Bahrain, Saudi Arabia, and Kuwait—also rank high in per capita subsidy spending. Saudi Arabia itself provided nearly US$7,000 per person, the highest among the G20 economies. 

Looking ahead, the IMF expects explicit subsidies to decline to about 0.6% of global GDP by 2030, but implicit subsidies may climb from 5% in 2020 to 6.1% in 2030.  The article emphasizes that many countries “price fossil fuels incorrectly,” and argues for comprehensive fuel-price reform and non-price policies (like emissions standards or technology subsidies). It cites strong projected benefits: averting some 1.6 million premature deaths annually by 2030 and generating revenues equal to 3.6% of global GDP, which could be redirected toward lowering labor taxes, debt management, or productive public investment. 

Overall, the article offers a thought-provoking overview of the scale and implications of global fuel subsidies, and underscores the urgency of policy reforms to redirect these massive expenditures toward more sustainable and inclusive priorities

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