The Perverse Effects of A Variable Oil Import Fee

David R Henderson

The Energy Journal, 1989, vol. 10, issue 4, 159-171

Abstract: If the world oil market is at all monopolistic, then a variable import fee (VIF) has more perverse effects than a flat import fee on the country that imposes it. Like an import quota, a VIF makes the importing country ‘s demand for oil less elastic and increases the price paid by buyers in that country. Moreover, a VIF does not necessarily yield any tariff revenue to the country that imposes it. Finally, under very plausible conditions, a VIF may facilitate price discrimination by a monopolistic foreign producer against the country that imposes it.

Keywords: Variable oil import fee; Perverse effects; Oil supply (search for similar items in EconPapers)
Date: 1989
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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:10:y:1989:i:4:p:159-171

DOI: 10.5547/ISSN0195-6574-EJ-Vol10-No4-10

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