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Metadata Glossary

CodeNY.GDP.PETR.RT.ZS
Indicator NameOil rents (% of GDP)
Long definitionOil rents are the difference between the value of crude oil production at regional prices and total costs of production.
SourceWorld Bank staff estimates based on sources and methods described in the World Bank's The Changing Wealth of Nations.
TopicEnvironment: Natural resources contribution to GDP
PeriodicityAnnual
Aggregation methodWeighted average
Statistical concept and methodologyThe estimates of natural resources rents are calculated as the difference between the price of a commodity and the average cost of producing it. This is done by estimating the price of units of specific commodities and subtracting estimates of average unit costs of extraction or harvesting costs. These unit rents are then multiplied by the physical quantities countries extract or harvest to determine the rents for each commodity as a share of gross domestic product (GDP).
Development relevanceAccounting for the contribution of natural resources to economic output is important in building an analytical framework for sustainable development. In some countries earnings from natural resources, especially from fossil fuels and minerals, account for a sizable share of GDP, and much of these earnings come in the form of economic rents - revenues above the cost of extracting the resources. Natural resources give rise to economic rents because they are not produced. For produced goods and services competitive forces expand supply until economic profits are driven to zero, but natural resources in fixed supply often command returns well in excess of their cost of production. Rents from nonrenewable resources - fossil fuels and minerals - as well as rents from overharvesting of forests indicate the liquidation of a country's capital stock. When countries use such rents to support current consumption rather than to invest in new capital to replace what is being used up, they are, in effect, borrowing against their future.
License URLhttps://datacatalog.worldbank.org/public-licenses#cc-by
License TypeCC BY-4.0
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