Fuel Prices Rose Despite Government Loan to Fuel Importers

By B.KHASH-ERDENE

The Fair Competition and Consumer Protection Authority announced on Monday that the fuel prices are going to increase by 50 MNT, this despite the soft loans issued by the Mongolbank to stabilize petroleum prices.
O.Magnai, head of the Fair Competition and Consumer Protection Authority said, “Our nation imports around one million tonne petroleum products annually. From this, 65 percent is diesel, 20 percent is AI-92, and ten percent is A-80. 55 percent of the imports are bought by mining companies, and the rest are sold on retail to the public. The policy the government has regarding the price allows fuel importers to sell fuel for their market price to mining companies and maintains a policy of stabilizing retail price to public.”
We have been informed previously that Mongolian fuel importers have been granted soft loans totalling 83.49 billion MNT to date by the Ministry of Mining and Mongolbank in order to maintain stability of retail prices of gasoline and diesel, under the price stabilization programme. The government believed the low interest loans would provide enough capital for fuel importers to keep their prices stable even in times of intense foreign currency fluctuation.
Importers have said that were it not for the soft loans issued by the government, the increase of gasoline and diesel prices would have been as high as MNT 210 per litre.
Sod Mongol, Shunkhlai, Petrovis and Magnai Trade companies have increased retail prices of the fuel price by 50 MNT for AI 95.
The increase has taken the retail price of A-80 to MNT 1530 per litre, while prices of gasoline AI-92 and diesel rose to 1620 MNT and 1750 MNT.
According to Business Mongolia, NIK which is one of the largest importers and retailers of the petroleum goods in Mongolia has not yet increased their prices. The company said that they are currently looking into the issue and conducting more research. NIK did not receive the soft loan offered by the Mongol Bank and government and therefore is more likely to increase their retail prices well above MNT 50, if they decide to increase their retail prices.