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# **Country E R Pricing** **<u>policy and strategy</u>**

# **Fuel supply conditions**

<mark>kg since Nov 2003 (with higher prices earlier). Ex-refinery prices of available on the market; instead hydrous gasoline and diesel were raised twice in 2012, and in Jan and Feb ethanol and a gasoline-anhydrous ethanol 2013. Government adjusts a tax on gasoline and diesel contributing to blend are sold for spark-ignition vehicles. intervention in the economic domain, called CIDE (Contribuição e The amount of ethanol in the gasolineIntervenção no Domínio Econômico), to further stabilize retail prices. ethanol blend is regulated and varies A negative CIDE tax was levied on LPG until Apr 2002. Monthly between 18% and 25%. The blending average retail prices of diesel (averaged across the country) and FOB percentage is determined largely by benchmark prices relevant to Brazil since 2007 are shown below. The sugarcane production and world sugar plot shows significant price smoothing. prices. Decreasing the percentage of</mark> 2.5 <mark>ethanol increases demand for gasoline, requiring gasoline imports in recent years and forcing Petrobras to import at world</mark> 2.0 <mark>prices and sell at a loss on the domestic market.</mark> 1.5 1.0 0.5 U.S. Gulf Coast spot price Retail in Brazil 0.0 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 **<mark>Consequences of pricing policy</mark>** <mark>: Petrobras’ refining, transportation, and marketing division lost US$8.5 billion in 2011 and US$17.5 billion in 2012. The recent decline in the company’s financial performance, including its first quarterly loss in 13 years posted in August 2012, has been blamed in large part on low domestic fuel prices. Cuts in CIDE in recent years have cost hundreds of millions of dollars.</mark>

||of dollars.<br>**Social protection**: In Apr 2002, the LPG subsidy was eliminated and<br>replaced with assistance to enable the poor to use LPG through LPG<br>vouchers in Bolsa Familia, government’s social welfare program.<br>**Information**: Agência Nacional do Petróleo, Gás Natural e<br>Biocombustíveis (ANP, National Agency of Petroleum, Natural Gas<br>and Biofuels) posts detailed historical and current information on<br>prices on its Web site. Information posted includes weekly surveys of<br>retail prices of gasoline, diesel, and LPG and marketing margins. In<br>May 2004, the survey coverage was expanded to a total of 555<br>locations. ANP also issues annual reports on global and domestic<br>prices.|<br>|
|---|---|---|
|Cambodia|**Pricing policy**: Fuel prices are deregulated, but government has<br>engaged oil companies, urging them to lower prices from time to<br>time.|**Supply**: There is no oil production in<br>Cambodia, but government has been<br>pursuing a domestic refinery project since<br>the commercial oil discovery in 2005.|
|Cameroon<br>√|√<br>**Pricing policy**: Government operates a stabilization fund, Caisse de<br>Stabilisation des Prix des Hydrocarbures (CSPH, Fund for<br>Hydrocarbon Price Stabilization). Automatic fuel price adjustments|**Supply**: There is one small refinery, which<br>is not designed to process domestic crude<br>and uses imported crude oil.|
||<br>were suspended following protests in Feb 2008 (see below) and fuel<br>prices were lowered. Fuel prices were frozen until Dec 2008 when<br>they were lowered, and have not been adjusted since. Government’s<br>policy since 2008 is to compensate the national oil company’s<br>refinery for the difference between the prices set by the formula<br>adopted in 2007 and the administratively fixed prices. Government<br>announced fuel price increases effective Jan 2012, but backed down<br>after threats of a strike. A finance ministry official told Reuters that<br>the events of 2008 as well as the protests in Nigeria in January 2012|<br>**Shortages**: Shortages of LPG have been<br>frequently reported.|