36

|**Country E R**|**Pricing policy and strategy**|**Fuel supply conditions**|
|---|---|---|
||pipeline networks. The diesel price for public transport used to be<br>subsidized, costing government 6.5 billion pesos (US$1.5 billion) in<br>2011. Government brought the diesel price for public transport to be<br>in line with the regular retail prices in early 2012.<br>**Response to fuel tourism**: Filling stations near the Brazilian border<br>list two different prices for gasoline, one for cars with Argentinian<br>license plates and another one for foreign plates, to restrict Brazilian<br>drivers from buying cheaper fuel in Argentina.<br>**Pressure on oil companies to lower prices**: In Aug 2010,<br>government ordered oil companies to roll back price increases,<br>while simultaneously threatening to apply the 1974 Law of Supply.<br>Prices remained frozen between mid-Aug and mid-Dec. In February<br>2011, government issued a resolution after Shell Argentina raised<br>gasoline and diesel prices by up to 3.6%, ordering Shell to reverse<br>the price increases, imposing a price freeze, and requiring oil<br>companies to maintain supplies to the local market at prior-year<br>levels. The resolution was repealed in the following month. In Jan<br>2012, government accused oil companies of over-charging cargo<br>transporters, launched an investigation, and later in the month<br>ordered the companies to lower diesel prices for both cargo and<br>passenger transport companies.<br>**Consequences of subsidies**: Some 3,500 retail outlets closed<br>between 2005 and Mar 2010 because of poor profitability.<br>**Use of export tax to lower domestic prices:**Until Jan 2013, the<br>export tax on crude oil was 100% above US$45/barrel (bbl), making<br>the export price US$42/bbl. Government relaxed the export tax in<br>Jan 2013, raising the oil export price from US$42 to US$70/bbl.<br>**Information**: There is comprehensive coverage on the Web of<br>current and historical gasoline, kerosene, and diesel prices by<br>location and company. Government uses price surveys to boost<br>transparency and indirectly press companies to reduce prices.<br>Monthly price surveys are carried out at filling stations and the<br>National Statistics and Census Institute (Instituto Nacional de<br>Estadistica y Censos, or INDEC) posts price and volume<br>information for each filling station every month on its Web site,<br>going back to Dec 2004.|<br> <br> <br> <br> <br>year), on the condition that the participating<br>companies sell diesel at government-<br>controlled prices.<br>**Upstream sector**: The exceptionally low<br>export price of oil until Jan 2013 has led to<br>oil production falling from 0.72 million bpd<br>in 2006 to 0.61 million bpd in 2011, while<br>consumption grew from 0.47 million to<br>0.61 million bpd. Government increased the<br>export tax on natural gas from 45% to<br>100% in 2008. Natural gas production fell<br>from 46 billion cubic meters (bcm) in 2006<br>to 39 bcm in 2011, while consumption grew<br>from 42 to 47 bcm.<br>**Shortages**: Diesel shortages are frequent.<br>Refining capacity is inadequate, because<br>price controls and export restrictions<br>discourage investment in new capacity<br>addition. Gasoline shortages have also been<br>increasing, especially of non-premium<br>gasoline. Power plants are forced to switch<br>from natural gas to diesel during the peak<br>winter season for lack of gas. The Total<br>Energy program, established in 2007,<br>subsidized fuels used as substitutes for<br>natural gas to address gas shortages, but<br>increased petroleum product consumption.<br>Besides the foreign-exchange controls put<br>in place in 2011, since Feb 2012<br>government has required prior approval for<br>all import transactions, a move that may<br>worsen fuel shortages. Fuel shortages have<br>prompted government to invoke the Supply<br>Law of 1974. Amidst a gasoline shortage in<br>Mar 2010, government accused Shell and<br>Petrobras of intentionally lowering refining<br>production to create a supply shortage. For<br>the first time in 30 years, Argentina<br>imported gasoline. Government in Feb<br>2012 told oil companies to increase<br>production. Because of tightening<br>government control, the trade balance of<br>the energy sector turned negative for the<br>first time in 2011. To stem this trend,<br>government has steadily tightened trade<br>restrictions.|
|Bangla-<br>desh<br>√|<br>**Pricing policy**: Fuel prices are controlled by government and not<br>adjusted regularly. Prices were raised several times in 2011, but<br>were not adjusted between Dec 30, 2011 and Jan 4, 2013. In Mar<br>2012, the price of diesel needed to rise by another 45% to break<br>even. IMF reported in Mar 2012 that government was expected to<br>adopt an automatic adjustment formula by December 2012, which<br>would ensure full pass-through of changes in international prices.<br>Government raised fuel prices by up to 11% in Jan 2013. Even after<br>the Jan 2013 price increases, diesel and kerosene were reported to be<br>suffering from under-recoveries of about Tk 12 (US$0.15)/liter. The<br>price of LPG in 12.5-kg cylinders sold by Bangladesh Petroleum<br>Corporation(BPC)has not changed since Jun 2009.|<br> <br> <br>**Supply**: One small refinery meets less than<br>30% of the country’s demand. A plan to<br>triple the refinery capacity has been under<br>consideration. Various projects are<br>underway to increase storage capacity for<br>petroleum petroleum products and install a<br>single-point mooring that will reduce the<br>time for unloading crude oil and diesel<br>from 15 to 2 days.<br>**Shortages**: Shortages of natural gas and<br>power, the prices of which have been kept<br>low,are serious and have contributed to|