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

**Fuel supply conditions** 2011. **<mark>Supply</mark>** <mark>: Jordan has one refinery of about 100,000 bpd and imports 100% of its oil demand.</mark>

<mark>Jordan</mark> **<mark>Pricing policy</mark>** <mark>: Government controls fuel prices. Government</mark> **<mark>Supply</mark>** <mark>: Jordan has one refinery of about</mark> √ <mark>removed subsidies from all fuels except LPG in Feb 2008 and 100,000 bpd and imports 100% of its oil adopted a monthly price adjustment mechanism, but stopped demand. adjusting prices (of gasoline, diesel, and kerosene) in Jan 2011.</mark> **<mark>Impact of natural gas shortages</mark>** <mark>: The Gasoline, kerosene, and diesel prices were raised in Dec 2010, but pipeline carrying natural gas from Egypt to lowered in Jan 2011 in response to the events in Tunisia and Jordan has been repeatedly attacked, elsewhere in the region. An expert panel formed by the prime forcing Jordan to rely more on diesel and minister in May 2011 recommended smart cards for subsidized fuel oil for power generation. The finance goods instead of price subsidies. The kerosene and diesel prices ministry estimated that natural gas supply remained unchanged, except for a brief rise in Sep 2012. Until Nov disruptions in the first half of 2011 cost a 2012, the price of LPG sold in 12.5-kg cylinders had remained total of JD 637 million (US$0.9 billion). By frozen for years, except for four weeks in early 2009 when the price Apr 2012, there had been more than a was lowered slightly. In May 2012, Jordan raised the price of 95 dozen attacks since 2011, and Jordan RON gasoline to JD 1 (US$1.41)/liter from JD 0.795 (US$1.12), warned that the disruptions could cost more and substantially raised electricity tariffs for major industrial and than JD 1.5 billion (US$2.1 billion) in service sectors. In Nov 2012, unable to shoulder the growing budget 2012. deficit, government increased the price of LPG in 12.5-kg cylinders</mark> **<mark>Oil price discount</mark>** <mark>: Until 2003, Iraq by 54% and kerosene and diesel prices by 33%. Government began provided 100,000 bpd—half free and half at making monthly adjustments in Dec 2012 for all fuels except LPG. preferential prices—to Jordan. In 2006, Iraq The price of diesel for non-power users and average monthly agreed to supply 10,000–30,000 bpd of benchmark FOB price relevant to Jordan since 2008 are shown crude at a discount of US$18/bbl; delivery below. For a period of time, the retail price was lower than the FOB started in Oct 2007. The two countries price, signaling a large subsidy. negotiated a further discount of US$22/bbl</mark> 0.8 <mark>below the market rate in 2008 for 3 years for 10,000 bpd. The volume was increased</mark> 0.7 <mark>to 15,000 bpd in Jun 2011 but at a discount</mark> 0.6 <mark>of US$18/bbl. At the same time, Iraq began providing 30,000 tonnes a month of fuel oil</mark> 0.5 <mark>at a discount of US$88/tonne. In Nov 2012, Iraq offered 100,000 bbl of free oil, and</mark> 0.4 <mark>reiterated its commitment to supply 33,000</mark> 0.3 <mark>bpd at a preferential price provided there is infrastructure in Jordan to transport the oil.</mark> 0.2 <mark>However, in Jan 2013, Iraq closed the</mark> Arab Gulf FOB price <mark>border citing security concerns in Jordan,</mark> 0.1 <mark>cutting off Jordan from 10,000 bpd offered</mark> Retail in Jordan 0.0 <mark>at a discounted price.</mark> Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

**<mark>Protests</mark>** <mark>: The prices of 90 RON gasoline and diesel were increased in Sep 2012 but reversed within two days following street protests. The price increases in Nov 2012 were met with nation-wide protests, turning violent in some areas, killing one person, injuring 71, and quickly escalating into calls for a change of government. Government, however, did not roll back price increases.</mark> **<mark>Consequences of subsidies</mark>** <mark>: The fuel subsidies since 2005 have fluctuated by an order of magnitude from year to year: Year 2005 2006 2007 2008 2009 2010 2011 US$ million 707 394 432 278 61 94 714 % of GDP 5.6 2.6 2.5 1.3 0.3 0.4 2.4</mark> _<mark>Source</mark>_ <mark>: IMF.</mark> **<mark>Information</mark>** <mark>: Jordan Petroleum Refinery Company, a national oil company and Jordan’s sole refiner, posts current and historical fuel prices since 2008 on its Web site.</mark>

**Supply** : Kazakhstan is investing heavily in modernization and expansion of its refining

Kazakh√ √<sup>**Pricing policy**: Government sets ceilings on retail prices and</sup> stan influences fuel prices. Retail prices have been frozen for months at a