The article addresses the G20 compliance with its commitment to rationalize and phase-out inefficient fossil fuel subsidies. The analysis is based on the reports by several international organizations, namely OECD, IEA, OPEC and the World Bank. This paper also reviews different approaches to subsidy efficiency and price evaluation.

The results of the announced fossil fuel subsidy reform show that the performance of the countries in that field differs significantly. The author believes that the absence of universally accepted criteria of subsidy efficiency hampers the realization of the G20 initiative. As of now, the countries tend to modify their definitions of subsidies or approaches to assessing efficiency rather than implementing concrete policy measures.

The publication is prepared within the framework of a joint project "Enhancing Effectiveness of Russia’s Participation in G8, G20 and BRICS in Compliance with the Russian Federation National Priorities in Global Governance and Developing Recommendations for the Russian Presidency of G20 in 2013" implementing by Russian International Affairs Council (RIAC) and International Organisations Research Institute (IORI) of the National Research University “Higher School of Economics” in 2012.