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This document is the final report of work performed under contract to the Government of Sri Lanka, under an IDF Grant from the World Bank.This report deals with the component of Fiscal Policies on Fuel & Vehiclesof the UAQMP. The purpose of the fiscal policies assignment is to examine the effects of alternative options for pricing diesel, petrol and kerosene and for levying duties on different fuels and vehicles. The effects of the alternative policies on long-term fiscal sustainability, households' expenditure and welfare, vehicle emissions and the environment are assessed. The local input for the study has been mainly provided by the Department of Fiscal Policies & Economic Affaires of the Ministry of Finance & Planning.
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