Fynsa
Although historically the MEPCO was not the ideal system, we learned to live with it given its effectiveness and the rationale behind it. If we do not allow it to operate, it is as if it did not exist at all, and decisions on fuel prices would be made entirely at the discretion of officials.
Rather than a fund or a subsidy, the MEPCO is a mechanism that spreads the impact of volatility in international fuel prices over time. Understanding how it works allows us to assess both its benefits and its limitations.
We simulated what would happen to fuel prices and the CPI if MEPCO were to disappear completely overnight. Readers will likely view this scenario as unlikely, but it is useful to assess in advance the magnitude of the impact such a measure would have.
