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

<!-- Start of picture text --> 120<br>Arab Gulf spot price<br>100<br>Retail in Kathmandu<br>80<br>60<br>40<br>20<br>0<br>Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13<br> / liter of diesel<br>NPR<br><!-- End of picture text -->

# **Fuel supply conditions**

result. There have been charges of artificial shortages to push up prices.

**Response to commercial malpractice** : NOC in Apr 2012 began distributing red (1.5 million for households) and blue (0.5 million for commercial consumers) LPG cards. Only red-card holders are eligible for subsidized LPG after card distribution is completed. After 5 months, NOC had completed verification of only 5,000 consumers.

In Sep 2012, government announced that students in state colleges would be entitled to price discounts, over and above the subsidies already provided, on four LPG cylinders a year and 10 liters of kerosene a month. In response, students changed the planned oneday strike to protest against price increases on Sep 2 to half-day. This discount program has not been implemented.

**Consequences of subsidies** : NOC has been reporting large monthly losses, reaching as high as US$18 million in Jan 2012. In recent months, losses have been dominated by underpricing of LPG. In Dec 2012, NOC proposed a new subsidy mechanism for LPG, which would limit price subsidies to households only who would be entitled to one 14.2-kg cylinder a month at the subsidized price, and deliver the subsidy through a post-purchase cash refund. LPG cylinders for households would be colored red, and other cylinders blue, in addition to households receiving red cards and all other consumers blue cards.

|**Protests**: Protests against fuel price hikes by students are common.<br>**Information**: NOC posts historical fuel prices going back to 1996,<br>current prices at 13 locations, monthly losses for each fuel per liter<br>and in total, and the price structure for each fuel. In 2012, the<br>highest monthly loss occurred in Apr, amounting to US$19 million.<br>The frequency of retail price adjustments is shown below:||
|---|---|
|Year<br>2008<br>2009<br>2010<br>2011<br>2012||
|Gasoline<br>5<br>1<br>4<br>3<br>6||
|Diesel and kerosene<br>4<br>3<br>5<br>3<br>7||
|LPG<br>2<br>1<br>2<br>0<br>3||
|Nicaragua<br>√<br>**Pricing policy**: Prices were deregulated in 1999 except LPG, for<br>which maximum prices are set by location. When Tropigas, which<br>controlled 60% of the LPG market at the time, asked for a 100%<br>price increase amidst serious LPG shortages, the president in Sep|**Supply**: PetroCaribe member.<br>**Stockholding**: There is a minimum<br>stockholding requirement of 10 days of<br>supply.|
|2008 declared an economic state of emergency for six months,||
|authorizing Nicaraguan Institute of Energy to import and sell LPG.<br>The state of emergency was repealed in Jan 2009.||
|**Information**: Instituto Nicaragüense de Energía (Nicaraguan||
|Institute of Energy) posts the average prices of three deregulated<br>products—gasoline, diesel, and kerosene—surveyed at about 75<br>filling stations in Managua every week, and provides details on the<br>three highest-priced and three lowest-priced filling stations as<br>money-saving tips.||
|Niger<br>√<sup>**Pricing policy**: Prices have been uniform throughout the country</sup><br>since Aug2001. Beginningin Jan 2012, gasoline and dieselprices|**Supply**: The first refinery in the country<br>began operatingin Nov 2011,together with|