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|**Country E R**|**Pricing policy and strategy**|**Fuel supply conditions**|
|---|---|---|
||particularly on gasoline, to compensate oil companies for losses<br>suffered. Social Responsibility Levy and VAT on gasoline imports<br>were removed in 2010. Government increased the prices of gasoline<br>(by 9%), diesel (37%), kerosene (49%), and fuel oil (80%) in Feb<br>2012. Although the price of fuel oil sold to CEB was raised by 50%<br>in Feb 2012, it remains subsidized.<br>**Protests**: The large price increases in Feb 2012 sparked protests.<br>Some private bus operators stopped operating, and violence broke out<br>when fishermen protested, killing one.<br>**Social protection**: The national poverty alleviation program,<br>Samurdhi, provides a monthly allowance for kerosene to households<br>without electricity, raised from SL Rs 100 (US$0.85) to SL Rs 200<br>(US$1.71) in February 2012.<br>**Compensation**: Following a 37% price increase, government in Feb<br>2012 agreed to provide 50 liters of fuel per day to short-distance<br>buses and 80 liters to long-distance buses at the old diesel price. In<br>addition, SL Rs 1,550 (US$13) will be provided to each short-<br>distance private bus owner and SL Rs 2,480 (US$21) to each long-<br>distance private bus owner. Government also granted per-liter<br>subsidies of SL Rs 25 (US$0.21) and SL Rs 12 (US$0.10) to fishing<br>boats fueled by kerosene and diesel, respectively.<br>**Hedging**: CPC entered into a series of contracts to hedge a portion of<br>its oil imports beginning in 2007, increasing the amount hedged over<br>time to about one-third of oil imports. Lanka IOC also hedged. As<br>long as oil prices were rising, hedging was advantageous, but<br>hedging proved to be extremely costly once oil prices began to crash<br>in the last few months of 2008. In the end, Sri Lanka’s treasury was<br>exposed to about US$464 million in claims from three foreign and<br>two local banks. The perception that the hedging deals were unfairly<br>structured and that the public was being asked to pay for the hedging<br>losses through higher retail prices and not benefiting from falling oil<br>prices rapidly gained wide acceptance, and petitions to that effect<br>were filed. The cabinet appointed a risk management committee to<br>review all hedging contracts and to minimize the losses in Nov 2008.<br>The supreme court ordered a temporary suspension of the CPC<br>chairman and payments to the banks until two petitions, alleging<br>fraud and corruption in the hedging deals, had been dealt with. The<br>supreme court ordered the treasury to handle fuel imports between<br>Dec 2008 and Nov 2009. Lanka IOC also reported losses from<br>hedging.<br>**Consequences of subsidies**: CPC’s operational losses were SL Rs26<br>billion (US$0.23 billion) in 2009, SL Rs27 billion (US$0.24 billion)<br>in 2010, and SL Rs94 billion (US$0.85 billion) in 2011, due to<br>provision of heavily subsidized fuel oil to the power sector, price<br>control, and non-payment by several institutions, particularly CEB.<br>SL Rs55 billion (US$480 million) worth of treasury bonds were<br>issued in Jan 2012 to settle outstanding debts owed to CPC by CEB<br>and other state-owned enterprises (source Central Bank of Sri<br>Lanka).<br>**Information**: Historical prices are posted on CPC’s Web site. The<br>Central Bank of Sri Lanka in its reports regularly provides statistics<br>on subsidies.|<br> <br>|
|Syrian<br>Arab Rep.<br>√<br>√|<br>**Pricing policy**: Government controls, subsidizes, and infrequently<br>adjusts fuel. Most gasoline is 90 RON, the price of which was raised<br>to S£44 (US$0.93)/liter in Sep 2010, and raised again in Dec 2011.<br>In Nov 2010, government said it would allow imports of 95 RON<br>gasoline,to be sold at S£50(US$1.08)/liter. In 2010, government|**Supply**: Syria has two refineries, both of<br>which are slightly larger than 100,000 bpd<br>and the larger of which has a processing<br>unit for making more diesel.<br>**Shortages**: Severe diesel shortages were|