21 For liquid fuels, trade restrictions take the form of high export tariffs or export bans (consumer support), or high import tariffs (producer support). Kazakhstan has had a continual ban on exports of various refined products since 2010, which began as a temporary ban during the planting and harvesting season, to prevent fuel shortages. Argentina and Bolivia have used very high export duties on crude oil to keep domestic prices low, although more recently Argentina began subsidizing oil production by offering high prices as incentives for oil producers. Vietnam has frequently adjusted import duties—the “standard” rates of which were historically 35 percent for most fuels and 30 percent for diesel—as a means of smoothing oil price volatility. Zambia uses import duties on petroleum products in part to protect its sole state‐owned refinery, effectively providing producer support. Russia has a formula for computing export duties, which are high and intended to keep domestic prices low and increase domestic supplies. In October 2013, the export duties were US$374.70 per tonne of gasoline (about US$44 per barrel) and US$274.80 per tonne of diesel (US$37 per barrel). In 2015, they have been about one‐third to one‐fifth of the values in October 2013. The duties set for September 2015, for example, were about US$10 a barrel for gasoline and US$7 for diesel, and by January 2016 fell further to US$44.70 per tonne (US$5.30 per barrel) and US$29.30 per tonne (US$3.95 a barrel), respectively. The consequent low domestic prices have historically discouraged investment in refineries, forcing the government to postpone the introduction of tighter fuel specifications repeatedly (Kojima 2013a).

For natural gas, trade restrictions usually take the form of domestic supply obligations coupled with low domestic prices set by the government, driven in turn by subsidies in other sectors. All too frequently the domestic prices are too low to encourage gas exploration, development, and production, leading to gas shortages despite domestic supply obligations. The need to keep domestic gas prices artificially low in turn arises from subsidies for electricity and a few other industries, which typically include fertilizer manufacture as a means of subsidizing agriculture. This compounding of subsidies leads to multiple problems. The subsidized fertilizer and power sectors are often inefficient—fertilizers that can barely compete with imports, and a power sector with large aggregate technical, nontechnical, and collection losses—or else fertilizers are exported. Nigeria, which ranks ninth globally in gas reserves ( _Oil and Gas Journal_ 2014), has been suffering from acute gas shortages for years, stranding power generation capacity. Not being able to generate and sell electricity means the general financial situation of power generation companies, already weak from power subsidies, is weakened even more. The ability of the power sector to pay gas producers is further reduced, resulting in large payment arrears and even lower gas production, perpetuating this vicious cycle. Frustrated by continuing gas shortages, some power generation companies and even fertilizer manufacturers have opted for willing‐buyer/willing‐seller arrangements, paying much higher prices than the official prices.

Trade restrictions do not necessarily benefit the intended beneficiaries. Between 1975 and December 2015, crude oil exports from the United States had been largely banned to curb upward pressure on domestic oil prices. In recent years, this widened the price difference between West Texas Intermediate (U.S. benchmark crude) and Brent (a European benchmark crude). However, consumers do not buy and consume crude oil; they consume refined products. The prices of refined products in turn are set by market forces based on regional and global supply and demand. As a result, this ban on crude oil exports by the U.S. government benefitted largely refineries and not consumers. Another example is fertilizer manufacture in Nigeria. The price of natural gas for fertilizer manufacturers is only US$1/mmBtu, but