Event: Fuelling inequality – The gendered impacts of World Bank and IMF fuel subsidy removal
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At the margins of the World Bank and IMF Spring Meetings 2026, MENA Fem Movement for Economic, Development and Ecological Justice, Fundación Ambiente y Recursos Naturales, ActionAid USA and Bretton Woods Project organised a discussion on the gendered impacts of fuel subsidy removal policies promoted by the Bretton Woods Institutions (BWIs). The discussion was based on the findings of BWP’s latest report, Fuelling inequality: The gendered impacts of World Bank and IMF fuel subsidy removal, launched ahead of the meetings.
The event was moderated by Niranjali Amerasinghe, ActionAid USA. Panelists included: Tara Povey, Gender Project Lead, Bretton Woods Project; Julia Gerlo, Research Consultant, Fundación Ambiente y Recursos Naturales; Terry Anne Owino, Lead of Women’s Climate Action and Livelihoods Development, Feminists for Peace, Rights, and Climate Center; Shereen Talaat, Director and founder, MENA Fem Movement for Economic, Development and Ecological Justice; and Daniel Munevar, alternate Executive Director to the IMF, Colombia.
Minutes from the event
Niranjali: This discussion will focus on IMF and World Bank fossil fuel subsidy removal policies – looking at their impacts, and what this means going forward, particularly in relation to climate debt and debt campaigners.
Tara, two questions for you, building on the new report that BWP and MENAFem have recently put out on this topic: First, what impact do these subsidy removal policies have on countries’ fiscal space and broader climate policy? And second, what does your research show about the gendered impacts of these policies?
Tara: Report draws on new qualitative data collected in 2025 in three countries – Egypt, Kenya and Bangladesh. Methodology inspired by participatory research approaches, which have the benefit of allowing the researcher to learn from the knowledge and experience of people who directly experience the policy. Therefore, its findings are based on the expertise of communities that experience IMF and World Bank policies, establishing the authority of this experience to challenge the policy frameworks of the institutions.
It uses a feminist political economy approach that the policies of the BWIs that are enforced through loan agreements are not gender neutral – they reproduce structural marginalisation deepen the exploitation of marginalised groups and the extraction of their labour, skills, time and resources in the name of promoting economic growth and stability. Interviews reveal women stepping into the breach left by retreating public services, and their unpaid labour quietly propping up an economy undergoing neoliberal restructuring. The removal of fuel subsidies therefore increases women’s unpaid labour and deepens their economic exploitation.
The BWIs’ so far fail to systematically measure the impact on unpaid and underpaid care work of fuel subsidy removal, and indirect impacts such as health and education – and are reluctant to change policy advice when they do recognise negative impacts. The IMF in particular justifies the policy with the questionable idea that subsidies are regressive and some grandiose claims on how they will lead to emissions reductions. But fossil fuels are a strategic commodity with a low elasticity of demand, meaning that many consumers of petroleum products or gas cannot easily switch to other sources of energy. Without ending producer subsidies, tackling energy monopolies and providing affordable ‘green’ energy sources, removing consumer subsidies has the effect of entrenching social and gender inequalities while maintaining the power and profits of monopolistic fossil fuel multinationals.
Our interviews reveal that Global South consumers also pay through their increased vulnerability to climate catastrophe. And how women are required to take on expensive personal debt that other household members may not be tied to, or pay in instalments with costly interest, simply to survive
We argue that BWIs’ fossil fuel subsidy policy follows a neoliberal model that rolls back state welfare systems and entrenches the power of private and external sector actors in the economy, while having little to no impact on mitigating climate change. As a result, the most marginalised fuel consumers in the Global South – most of whom have little choice in terms of consuming fossil fuels – are unjustly paying the costs, through increased prices as a result of the removal of subsidies, constrained fiscal space as a result of debt servicing, human and environmental degradation, and through private sector de-risking.
Niranjali: Points to a key contradiction: IMF shows strong concern about wealth taxes and capital flight on the tax side, but far less scrutiny of policies that disproportionately affect poorer households.
Julia, two questions: What is the link between fossil fuel extraction and subsidy removal – is this reducing emissions or discouraging extraction? And what impacts are being seen in Argentina on gender and social inequality?
Julia: Argentina has been under continuous IMF programmes for years, which have strongly shaped fiscal and energy policy. In that context, reducing energy subsidies has become a central reform priority – framed as both fiscal consolidation and increasingly as climate policy. But in practice, there is a clear imbalance. The focus is on cutting demand-side subsidies – those that support households’ access to basic energy like cooking and heating – while supply-side subsidies to fossil fuel producers are largely untouched or even expanded. So households are being asked to pay more, while fossil fuel companies continue receiving substantial public support.
This sits within broader IMF conditionalities, where subsidy reduction is a consistent structural benchmark. The result has been sharp tariff increases moving toward “cost recovery” levels – between Dec 2023 and Aug 2024, electricity prices rose around 200% and gas around 1,000% in nominal terms, taking a significant share of household income. Between 2016 and 2022, fossil fuel subsidies reached around $10 billion – endorsed in IMF technical documents – while renewable energy programmes were reduced or eliminated, and new fossil fuel incentives were introduced.
There’s also a political economy issue: high informality means many households are not captured in targeting systems, and around 60 per cent of the population experiences some form of energy deprivation. Subsidy cuts directly affect basic survival – cooking, heating, and paying bills. All of this is happening within repeated IMF programmes and debt constraints, which shape policy space and limit alternatives. While there is agreement that fossil fuel subsidies need reform, it cannot be one-size-fits-all. Timing, sequencing, and design matter. Energy access has to be treated as a right, not just a market outcome. What’s needed is a more progressive, differentiated approach – addressing inequality and informality, and looking at both demand- and supply-side subsidies together, not just households.
Niranjali: Let’s now pivot to solutions. Terry Anne, could you speak to the intersection of climate and gender in shaping solutions to the climate and debt crises? And what key principles should guide feminist economic alternatives if we’re aiming for a just transition?
Terry Anne: We’re in a convergence crisis: climate breakdown, escalating debt, and systemic inequality all happening at once. In that context, women are repeatedly acting as shock absorbers of neoliberal systems. In climate and gender policy, we often see so-called “green reforms” that stabilise macroeconomies but destabilise women’s lives. Austerity and subsidy removal – like those pushed by the IMF – are a clear example. When fuel prices rise, the shock doesn’t disappear – it is absorbed at household level, with a direct increase in unpaid care work, and a depletion of health, time, and energy.
On the debt side, many countries are locked into borrowing cycles driven by fossil fuel infrastructure or crisis response. Debt repayment then competes directly with spending on health, education, and care systems – the very systems that help societies deal with climate shocks, which already disproportionately affect women.
Austerity also cuts childcare and healthcare, which reduces women’s labour participation – even while policies sometimes claim to support it. So, there’s a clear contradiction: inclusion is talked about, but the conditions for inclusion are being undermined. But it’s not all lost – this is where feminist economic alternatives come in:
- First, we need to value the care economy – shifting from GDP as the main measure of success toward a well-being economy that recognises unpaid and reproductive labour.
- Second, we need to reduce, redistribute, and recognise care work through major public investment in social infrastructure.
- Third, we need to challenge the current model directly – rejecting austerity, privatisation, and deregulation that rely on undervalued women’s labour.
On debt, we need to be clear: it functions as a coercive, colonial tool. It constrains climate action and diverts resources from health, education, and care – especially in the Global South. Debt cancellation is therefore central to any serious climate and gender justice agenda.
On fiscal justice, feminist budgeting and taxation means rethinking how resources are raised and allocated – centring life and wellbeing rather than capital accumulation.
And finally, ecological justice means holding all three together: people, planet, and economy. Right now, the balance is off – the economy is prioritised, while people and planet are deprioritised. That triangle needs to be rebalanced for any just transition.
Niranjali: One of the country case studies in the report focuses on Egypt, with qualitative research by MenaFem researchers. Could you walk us through what that case shows about the impacts of subsidy removal policies? And second, given the upcoming discussions – including the first conference on transition away from fossil fuels in Santa Marta – how do you see the link between energy subsidy removal and a truly just transition grounded in social, ecological, and human rights?
Shereen: To be clear, fossil fuel subsidy removal is not climate policy – it is a fiscal and political instrument. In Egypt, as in much of the Global South, these reforms are framed as technical measures – efficiency, fiscal stability, even climate action. But since 2015, under economic programmes, subsidy removal has been central, and the outcomes are very different. Prices for gas and electricity have risen sharply, public services have weakened, and food and transport costs have increased. The burden has not disappeared, it has been shifted from the state to households, and within households, to women. Consumer subsidies are reduced, but structural drivers are left untouched. This is the core contradiction: subsidy removal is treated as climate policy, but without structural change it becomes cost redistribution, not transformation.
A real transition has to start from power – who controls energy systems, who benefits, and who decides investment. Public investment is also essential – in affordable transport, renewable energy, and universal services. Without this, the burden again shifts to households and women’s unpaid labour. And we need to be explicit: the system depends on unpaid labour – and that is not sustainability, it is exploitation. So the question is not just whether subsidies are removed, but how, why, and for whom. A transition cannot be called “just” if it depends on survival trade-offs.
Finally, this sits within wider pressures – debt crises, instability, and war – shaping outcomes across highly indebted countries like Egypt, Jordan, Morocco, and Tunisia. It also connects to global debates, including the upcoming conference in Santa Marta on fossil fuel transitions, where energy, debt, and justice are increasingly central. We need to move beyond price reforms to structural questions of power, debt, and global energy governance – including debt cancellation, public energy systems, universal access, and accountability over where “savings” go. A just transition is not only about changing energy sources – it is about transforming the economic system that produces these inequalities.
Niranjali: So, Daniel, from your perspective at the IMF Board: How are subsidy reforms and their distributional impacts discussed at Board level – including gender and household effects? And second, what would it take to shift toward a different approach – one that reflects green industrial policy and a genuinely just transition?
Daniel: I think it’s important to step back and look at how all this sits within the wider context of energy transition. Climate policies, particularly in how they are embedded in economic decision-making, are still largely shaped from a rich-country perspective, with very limited understanding of what low-income countries or small island developing states are facing. You see this clearly in the imbalance between mitigation and adaptation. There is a strong emphasis on mitigation instruments, while adaptation and loss-and-damage responses are far less prioritised. A good example is Pakistan: a country facing major loss-and-damage pressures and deep energy system constraints, yet much of the policy emphasis ends up on things like electric appliance regulation. Meanwhile, the core issues remain – around 85% of energy still relies on fossil fuels, and around 100 million people are in conditions of climate vulnerability. So, the instruments being deployed are often misaligned with the actual scale and nature of the challenge.
If we narrow this down to subsidies, what matters is that these policies are often discussed in aggregate terms, but the impacts are highly unequal. One key point is the difference between energy prices and physical availability. Subsidy removal assumes two things: first, that energy is physically available in the system, and second, that people have the income to pay for it. In many contexts, neither holds.
Across Africa, we already see deep energy poverty. In parts of Asia, the issue becomes more about access and physical supply – how much energy is available, and how households even think in terms of “days of energy security.” In those cases, no amount of financial adjustment solves the problem if there is no physical supply of oil or refined products. So, the constraint is not only price – it is availability and global distribution of energy itself.
There is, of course, a very real concern that subsidy systems are regressive. Higher-income groups tend to consume more energy – particularly through transport like cars – so universal fuel subsidies often benefit wealthier households more. But the other side is that removing subsidies is not a free adjustment either – it creates fiscal pressures, and the state ends up absorbing costs elsewhere. So, the key issue is opportunity cost: how public resources are allocated, and under what assumptions. In many cases, subsidies rise faster than policy responses can adjust, creating significant fiscal strain and delayed correction mechanisms.
From a country perspective, this becomes highly contextual. In Colombia, for example, you have an oil-producing country that in theory benefits from higher oil prices, but much of that gain is offset by fuel subsidy schemes – particularly for diesel and transport. So higher revenues are effectively recycled into higher expenditures through subsidies. The policy question then becomes whether this is the best use of public resources, or whether there are more targeted ways to protect vulnerable groups without broad-based subsidies. Other countries are taking different approaches. Chile removed subsidies after the shock, allowing prices to rise significantly. Ecuador, in the context of an IMF programme, has withdrawn subsidies while introducing targeted protection measures for vulnerable groups. There is no single model – but very different political choices being made.
What is common is that the countries most affected are also those hit hardest by the pandemic and the war in Europe – largely energy-importing, food-importing, low-income economies. You have a concentrated group of countries repeatedly exposed to external shocks. In response, the G24 has been pushing for a more systemic adjustment at the IMF level – including expanding emergency financing windows, particularly the IMF shock and rapid financing instruments; a regular review and reduction of surcharge policies that disproportionately penalise highly indebted countries; and broader liquidity support tools, including SDR-related adjustments to improve crisis response capacity. There is also support within the G24 for strengthening instruments such as gold-based mechanisms and other IMF frameworks that could enable debt relief and cancellation processes, particularly through mechanisms like the CCR (Catastrophe Containment and Relief) structures. The underlying aim is to ensure that countries are not forced to absorb and repay shocks they did not create, while still maintaining basic fiscal space to protect vulnerable populations.
At the same time, there is recognition that we are relying too heavily on debt-based responses. Countries are becoming increasingly exposed, with limited repayment capacity, and even if the immediate shock stabilises, structural vulnerability remains. From Colombia’s perspective, the push is to use all available channels – IMF reform, multilateral coordination, and debt tools – to expand fiscal space and protect the most vulnerable, both domestically and internationally.
Questions & answers
Mahinour, Centre for Economic and Social Rights: What counts as “regressive” or “progressive” policy? From a human rights perspective, we already have a clear framework. International human rights law requires states to mobilise maximum available resources to realise economic and social rights. So retrogression is not abstract – it means any policy that increases harm or reduces people’s ability to enjoy those rights. And on that basis, we don’t need to speculate – we already have empirical evidence. In Egypt, for example, IMF programmes have been associated with around 5% of the population falling into poverty, which translates into millions of people.
On the question of targeted versus universal subsidies, UN Special Rapporteurs on extreme poverty have already found that targeting often contradicts state obligations and weakens rights-based outcomes. Universal subsidies, by contrast, are more effective in preventing poverty and protecting middle-income groups from falling further down -including women.
So the question becomes: is there any shift in thinking – either at the IMF or more broadly – toward addressing subsidy reform at the production level, rather than focusing primarily on household consumption?
Nabil Abdo, Oxfam International: I do think subsidies are not inherently good – and there is some validity in the IMF argument that they can disproportionately benefit higher-income groups because of higher consumption levels. But the key issue is that removal still tends to hurt people, and the poorest, most. So the real dilemma is not whether subsidies exist or not, but how they are designed – for example, whether there could be more gradual or tiered approaches, where basic consumption is protected and higher consumption is charged more.
At the same time, I think civil society needs to engage more seriously with the question of subsidies, rather than taking an absolute position. There is a balance to be found. But in contexts like Egypt and the wider region, subsidies were not just an economic instrument – they were part of the social contract. Historically, populations accepted restrictions in political freedoms in exchange for access to affordable services, jobs, and basic stability. Subsidies were central to that arrangement. So when subsidies are removed alongside broader neoliberal reforms, what happens is a weakening of that social contract – without a corresponding expansion of rights or protections. This raises a deeper political economy question: what happens to social cohesion and stability when economic protections are withdrawn but political conditions remain unchanged? And how is this accounted for in IMF thinking on “political economy”?
Julia: There is a real contradiction in how these policies are playing out. On the one hand, countries are being pushed to reduce subsidies and increase energy prices, but at the same time, programmes that would enable a transition – like renewable energy, especially distributed generation and rural access – are being cut or deprioritised. So the shift is not happening in a sequenced or coherent way. People are losing support for energy access, but they are not being given viable alternatives. In practice, that means higher prices without the possibility to transition to other energy sources.
Daniel: On the question of renewables and industrial policy, I think it’s important to recognise that successful industrial policy often depends on subsidies – and those are expensive. Not every country has the fiscal space to do that. So as more countries invest in renewables, there is a real risk that global inequalities will deepen because some countries can subsidise their transition, while others cannot.
On targeted subsidies, one of the big pushes right now – from both the Fund and the World Bank – is the development of universal social registries. These systems aim to map entire populations and allow for very granular, household-level targeting of transfers. In theory, that’s a very powerful tool: you can design very precise compensation mechanisms to offset shocks. But in practice, this is also being used to justify broader fiscal reforms, especially around taxation. For example, the argument becomes: you can remove VAT exemptions or increase consumption taxes, because you now have the tools to compensate households directly. So the same system that enables targeted support is also being used to justify policies that may increase the burden elsewhere. So there is a complex interaction between subsidy reform, tax policy, and social protection – and we need to think about both sides of that equation.
More broadly, I would stress that you cannot separate social policy from tax justice. If the state does not have the capacity to raise revenues in a stable and structural way, then it cannot sustain meaningful social protection. In many countries, social spending is built on volatile revenue sources, particularly commodities. When prices fall or shocks hit, that system collapses. So the question is not just how to design subsidies or compensation, but whether governments actually have the fiscal tools to support populations over time. The resources exist globally, but accessing them depends on tax systems, governance structures, and political decisions.
Jon, BWP: From our perspective, one of the motivations for the research was exactly this: to move beyond a very simplified or monolithic view of fuel subsidies, particularly in climate discussions. What we are seeing is that subsidy reform is often treated as a technical issue, but in reality it is deeply political and deeply embedded in broader systems. On the social contract point, I think it’s really important to underline that these reforms are often happening in quite closed and fragmented spaces. Policy conditionalities – whether from World Bank development policy financing or IMF programmes – are not always visible, even to national experts working in the sector. So there is a real disconnect between these reforms and broader public debate about what a just transition should look like.
Another issue is sequencing. Even where the idea is that targeted social protection will offset the impact of subsidy removal, in practice those systems are often not in place – or not functioning – when reforms are implemented. So what happens is that changes are introduced very quickly, sometimes overnight, and people are left to absorb the shock. That can create immediate disruption in livelihoods and basic living conditions.
From a climate perspective, this is also politically risky. If people experience these policies as harmful or unjust, it undermines trust and weakens support for climate action more broadly. And we are already seeing signs of backlash globally, which raises concerns about how durable and politically viable these transition policies are in the long term.
Daniel: On the question around price controls and differentiated pricing in the current context- especially with ongoing geopolitical instability and fuel price volatility – the reality is that the policy messaging is not entirely consistent. If you look at different IMF publications, you actually see different recommendations. For example, the World Economic Outlook suggests that monetary authorities should act decisively to contain inflationary pressures, while the Global Financial Stability Report suggests allowing economies to adjust through the shock. So there isn’t a single, coherent line. What we can expect, however, is something similar to what we saw in previous crises, where energy companies generate significant windfall profits during periods of price volatility. That raises the question of taxation – particularly how to capture those excess profits and redistribute them. There has been work on this, including proposals to tax extraordinary gains in the oil sector, especially given that many of these profits are not the result of productive investment but of market conditions.
At the same time, there is no strong or consistent position on price controls as such. But in practice, governments are under pressure to respond to rising costs and social demands. So regardless of the formal guidance, many countries will intervene in different ways to protect their populations, because the political and social pressures make that unavoidable.
Tara: I just want to end on what seems to be emerging from the current policy positioning. The message coming out is that the priority right now is not to increase or introduce new subsidies in response to the current crisis. But if we look at what actually happened in 2022, particularly in Europe and other advanced economies, the response was very different. Governments did introduce or expand subsidies, precisely because the scale of the economic shock was so significant and so disruptive across the entire economy.
So what will be important to watch is whether that pattern repeats: whether advanced economies once again respond with protective measures, while policy advice for the Global South continues to emphasise subsidy removal and fiscal tightening. That tension between what is recommended and what is practiced is something we need to keep paying attention to.
Niranjali: What’s really come through strongly in this conversation is how interconnected these issues are – power, tax justice, debt, and climate policy are not separate debates. One of the core challenges for many countries in the Global South is the limited ability to raise revenue in a fair and effective way. Without that, it becomes very difficult to respond to crises or to invest in just transitions. And unless there is a more collective global approach to taxation – particularly addressing capital flight, tax evasion, and the use of offshore systems – these constraints will persist. So I’m glad we’ve been able to bring in questions of power, debt, and tax justice alongside subsidy reform, because they are fundamentally linked.