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|**Country E R**|**Pricing policy and strategy**|**Fuel supply conditions**|
|---|---|---|
||time, for example the price of 92 RON gasoline in Astana between<br>August 2011 and March 2012. Because wholesale prices are not<br>controlled, recently wholesale prices—governed in part by import<br>prices—have exceeded retail prices. In Aug 2011, the oil ministry<br>and oil companies signed a memorandum to limit wholesale prices<br>to 87% of maximum retail prices. There is a preferential lower price<br>for diesel supplied to farmers. In 2012, the preferential price was<br>10–15% below the non-agricultural diesel price level.<br>**Use of export ban to lower domestic prices**: Regional shortages of<br>gasoline and diesel have prompted government to introduce seasonal<br>export bans on petroleum products to ensure sufficient domestic<br>supplies. In May 2010, government banned exports for six months.<br>The expiration of this ban has since been repeatedly extended, from<br>Nov 2010 to May 2011, July 2011, Dec 2011, Jul 2012, Dec 2012,<br>and most recently to end-Jun 2013.<br>**Use of export tax to lower domestic prices**: Although not as high<br>as those in Russia, export duties are sizable, and were increased to<br>US$114.05 /tonne in Aug 2011 for light products.<br>**Information**: The Statistical Agency of Kazakhstan posts monthly<br>average prices of gasoline and diesel in 18 cities on its Web site.|<br> <br> <br>sector to boost capacity and improve<br>product quality over the next several years<br>for self-sufficiency. Revamping of its three<br>main refineries for modernization through<br>the end of 2015 has led Russia and<br>Kazakhstan to sign a crude-for-fuel<br>agreement in 2012, whereby Russia<br>provides tariff-free petroleum products to<br>Kazakhstan and Kazakhstan supplies crude<br>oil. Disagreement over the formula to<br>calculate the amount of crude oil led<br>Kazakhstan in Jan 2013 to consider China<br>for refined products through a tolling<br>arrangement.<br>**Shortages**: Shortages in Jul–Aug 2009 in<br>southern regions prompted the anti-<br>monopoly agency to accuse oil companies<br>of creating artificial shortages to push up<br>prices and launch an investigation. The<br>agency began investigating into 44<br>companies in July 2011, stating that there<br>was no reason for price increases. Fuel<br>shortages began in Apr 2011 caused by a<br>price freeze imposed in Dec 2010, and<br>continued into the summer as wholesale<br>prices exceeded retail prices. Shortages<br>continued to be reported in Oct 2011.<br>Lower domestic prices than those in Russia<br>also discourage fuel imports from Russia.<br>Shortages of high-octane gasoline, one-<br>third of which is imported from Russia, are<br>common. Southern Kazakhstan experienced<br>severe fuel shortages in Nov 2011. Fuel<br>shortages were again reported in Mar 2012.|
|Kenya<br>√|<br>**Pricing policy**: Kenya deregulated its oil industry in 1994. After<br>concerns about over-charging by oil companies had been voiced in<br>several quarters, government in Dec 2010 began setting maximum<br>retail prices by location every month for gasoline, diesel, and<br>kerosene. Price calculations are based on volumes and costs in the<br>previous three months. Government removed the VAT on LPG in<br>2005. In Apr 2011, government cut diesel and kerosene taxes by<br>20% and 30%, respectively, and in May 2011 eliminated all taxes<br>and levies on kerosene (as well as maize and wheat). Kerosene was<br>nearly 20% cheaper than diesel in Jan 2013. The price difference<br>between kerosene and diesel, and the tax difference between<br>products destined for the domestic market and those for export, are<br>two drivers of commercial malpractice.<br>**Information**: The Energy Regulatory Commission posts landed<br>costs of crude oil, gasoline, diesel, and kerosene, and maximum<br>pump prices allowed in 70 towns on its Web site every month. The<br>Petroleum Institute of East Africa also posts industry statistics and<br>price and tax data, including statistics on the results of fuel<br>marking―kerosene marker and export marker―and tracing tests.<br>The results from 2012 found that independents were more likely to<br>be in violation than integrated companies.|**Supply**: There is one refinery in Kenya,<br>which is in need of rehabilitation and not<br>capable of operating at anywhere near its<br>design capacity. During the first 9 months<br>of 2012, the refinery operated at a fraction<br>of its capacity, meeting about 30 percent of<br>domestic demand. The product pipelines<br>are also in disrepair and outages are<br>frequent. Power shortages have on occasion<br>shut down the refinery and the pipelines.<br>**Bulk procurement**: Effective Jan 2004, to<br>take advantage of economies of scale in<br>importation, government centralized the<br>purchase of certain petroleum products and<br>all crude oil through an open tender system<br>coordinated by Ministry of Energy.<br>Questions have been raised on and off in<br>Kenya about whether its bulk procurement<br>system actually results in cost savings. For<br>example, in May 2011, Ministry of Energy<br>reportedly blamed high fuel costs on the<br>refiner’s having to go through a third party<br>to procure crude oil and manipulation of the<br>crude oilprices bytraders who alter the|