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|**Country E R Pricing policy and strategy**|**Fuel supply conditions**|
|---|---|
|billion (US$2.7 billion) in overpayments.<br>• Protests by marketers that they had not been invited by the<br>technical committee to challenge the allegations prompted<br>establishment in July of a Presidential Committee on Verification<br>and Reconciliation of Subsidy Payments, also headed by Aig-<br>Imoukhuede. This committee lowered the estimates of the<br>overpayments to ₦382 billion (US$2.5 billion), indicting 25<br>companies. One of the committee’s recommendations was to<br>verify shore tank certificates and records of sales proceeds.<br>• President Jonathan directed the committee to implement the<br>above recommendation. The report submitted in Nov indicated<br>that transactions of 50 companies, amounting to ₦232 billion<br>(US$1.5 billion), had not been legitimate.<br>**Information**: PPPRA’s Web site posts the pricing template for<br>gasoline and kerosene, indicating the magnitude of under-recoveries.<br>The status of PSF after 2008 is difficult to find on PPPRA’s Web<br>site although it is available through Oct 2011.||
|,<br>Pakistan<br>√<sup>**Pricing policy**: Ex-depot prices of automotive diesel have been</sup><br>deregulated since Jun 2002. Government was setting ceilings for ex-<br>depot prices of other fuels based on an import-parity formula until<br>Jun 2011, when these prices were also deregulated except kerosene.<br>Ex-refinery prices cannot exceed the average of Pakistan State Oil’s<br>(PSO) import prices in the preceding two weeks, excluding PSO<br>import incidentals. If PSO prices are not available, ex-refinery prices<br>are based on an import-parity formula. For LPG, government sets<br>ceilings for ex-refinery or ex-processing plant prices of domestically<br>produced LPG but not imported LPG. In 2012, Ministry of<br>Petroleum and Natural Resources reported on its Web site that fuel<br>prices were being subsidized through adjustments in the Petroleum<br>Levy. E10 has higher octane and is cheaper than pure gasoline.<br>**Hedging**: In Aug 2009, State Bank of Pakistan rejected the finance<br>ministry’s proposal to hedge oil prices for a year. Hedging losses<br>suffered by the Pakistan International Airlines in 2008 were<br>questioned by the Public Accounts Committee of the National<br>Assembly in June 2010.<br>**Information**: Oil companies are required to notify their selling<br>prices to Oil and Gas Regulatory Authority (OGRA), and the prices<br>are posted on OGRA’s Web site by company and location. In<br>addition, OGRA continues to compute and notify ex-refinery prices<br>of diesel, kerosene, and gasoline (containing 10% ethanol) every<br>month. Maximum prices of other fuels computed by Pakistan State<br>Oil (PSO) are also posted for information. OGRA also posts the<br>findings of inspections to check compliance and commercial<br>malpractice.|<br> <br>**Shortages**: When maximum fuel prices<br>were set by government, fuel shortages<br>were common just prior to price revision.<br>Gasoline shortages in early Jan 2009<br>prompted demonstrations across Pakistan.<br>There was an accusation that dealers<br>stopped buying fuel in late Jan 2009 in<br>anticipation of a price decrease, leading to<br>fuel shortages, and prospects of a price<br>increase in early Sep 2009 also reportedly<br>led to many filling stations stopped gasoline<br>sale. In Sept 2010, oil marketing companies<br>said that not being able to recover costs on<br>account of late payments by consumers and<br>of price differential claims prevented them<br>from complying with stock requirements.<br>**Stockholding**: The May–Jun 2011 shortage<br>prompted Pakistan Economy Watch to ask<br>the Supreme Court to intervene, and<br>prompted government to direct all oil<br>marketing companies to maintain stocks of<br>up to 20 days of consumption and give<br>them 6 months to comply or risk license<br>revocation or heavy penalties. While PSO<br>had been required to maintain 20 days of<br>petroleum product stocks, smaller<br>companies had to maintain only 7–14 days<br>of stocks. At the end of Jun 2011, OGRA<br>suspended the licenses of six companies for<br>failing to maintain gasoline stocks<br>equivalent to 14 days of typical<br>consumption.<br>**Impact of power and natural gas**: The<br>inability of power utilities to pay for fuel oil<br>has led to PSO’s cash flow problems and<br>eventually fuel shortages. PSO’s<br>receivables in May 2010 stood at PRs 114<br>billion ($1.35 billion), and by Jun 2011 PRs<br>131 billion ($1.5 billion). Natural gas<br>shortages have increased demand for LPG,<br>pushingupLPGprices. Fallinghydropower|