One Fuel, Two Prices: International experiences with dual pricing of fuel

This briefing note sets out some basic information about international experiences with “dual pricing”: selling the same fuel product at two different prices to different types of consumers.

It begins with a broad overview of information from international literature and then presents several detailed case studies. It finds that dual pricing is difficult to implement without prohibitively costly levels of leakage, illegal diversion and shortages. There are very few success stories—and effective implementation of dual pricing typically takes place where there is sufficient administrative capacity to employ other and better policies. If policy-makers decide that dual pricing must be adopted, it is essential to monitor leakage and diversion closely, choose a strong delivery mechanism and have strong enforcement capacity.