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# **Appendix 1: Pricing Policy Information by Country**

Table A1.1 provides detailed information on the downstream petroleum sector in each country, focusing especially on pricing policies. The table indicates whether a given country is a net oil exporter ( √ appears if it is under E in the second column) and whether it has at least one domestic refinery (R in the third column). Where refineries are described as being small, they are of uneconomic scale. In discussing refineries, topping refineries, which cannot make gasoline, are excluded. The table also describes the country’s pricing policy and strategy, supply conditions, and factors affecting fuel demand, such as power outages driving demand for diesel for emergency electricity generation, and supply conditions, such as unscheduled refinery shutdowns. The subsidy figures are based on the country staff reports by the International Monetary Fund (IMF) or government sources—including annual budgets, central banks, and governments’ own news reports. Government and central bank reports are likely to be accurate, but IMF staff reports sometimes report energy subsidies (that is, fuel and electricity) as fuel subsidies, as in Table III.1 in IMF (2012l). Because of the uncertainty regarding the coverage of what is reported as “fuel subsidies” in IMF staff reports, the source of the subsidy data (namely IMF or government) is indicated.

Graphs of domestic and benchmark FOB diesel prices for the last five to six years in local currency are shown for 11 countries to illustrate the workings of different pricing policies and what consumers have faced. FOB benchmark prices in the relevant regional refining centers are also plotted to show how world diesel prices were moving during the same period. The sources of the data are described in Table A2.1 in Kojima (2012). Of all the petroleum products, gasoline and diesel are widely consumed in every country, while the consumption of other petroleum products depends on country circumstances. Of the two most widely consumed fuels, governments are more likely to intervene in diesel fuel pricing, regarded in many countries as a “social” fuel because of the economy-wide effects of its price levels. For this reason, diesel fuel is selected for plotting to illustrate pricing policies of different governments. In addition, the recent price trajectory of LPG in Thailand is also shown, as it provides useful information.

Table A1.1: Oil export status in 2010, current refining status, pricing and tax policy and strategy, and fuel supply conditions

|**Country**|**E R Pricing policy and strategy**<br><br>|**Fuel supply conditions**|
|---|---|---|
|Angola|√<br>√<br>**Pricing policy**: Fuel prices are uniform in the country, controlled by<br>government, heavily subsidized, and last changed in Sep 2010, when<br>the prices of gasoline, but no other fuel, were raised.<br>**Subsidies**: IMF said in Aug 2012 that fuel subsidies in 2011|**Supply**: There is one small, old refinery.<br>The plan to build a new large refinery has<br>encountered a series of problems attracting<br>investment.|
||amounted to 7.8% of GDP (US$7.9 billion), equivalent to more than<br>90% of public investment spending.<br>|**Smuggling**: Fuels are smuggled out of the<br>country.|
|Argentina|√ √**Pricing policy**: The sector was deregulated in 1989, but in recent<br>years government has kept prices of all forms of energy low through<br>domestic gas and electricity tariff freezes, indirect price controls on<br>petroleum products, and heavy export taxes on oil. Government has<br>been controlling prices in many sectors of the economy through<br>“voluntary” price agreements since 2005 to curb inflation, including<br>those with petroleum product retailers. In Jul 2012, an executive<br>decree 1277/2012 was issued, abrogating sections of 1989 decrees<br>that provided for the freedom to set prices and to import and export<br>fuel. The decree established a new commission that has authority<br>over pricing. Prices of LPG in 10-, 12-, and 15-kg cylinders sold to<br>low-income households have been frozen for years. A federal fund<br>for LPGprovides stable LPGprices and helps expand naturalgas|**Supply**: Four large refineries provide the<br>bulk of domestic production. Venezuela<br>and Argentina signed a fuel purchase<br>agreement in May 2009. By end-2011, the<br>debt owed by Argentina had grown to<br>US$1.3 billion. The 1974 Law of Supply<br>allows the imposition of fines or<br>imprisonment of company executives for<br>shortages of goods, including fuels.<br>Argentina began using a tax-free import<br>system in 2005 to help make up for a<br>domestic diesel shortfall during the<br>agricultural seasons(middle and end of|