Our main conclusion was that the shortage was created by the manipulation of importers. The Chief of the Petroleum Authority, J.Amarsaikhan, told us that Mongolia needs 60,000 tons of petroleum products every month. Now that the month is almost over, we have 35,000 tons of petrol, including 15,000 tons of АI-92 kept in stock. It is thus clear that importers made up the shortage to profit from the situation. 

We recommended a few steps to improve the situation without delay, and also to remove dependence on imports in the long run. Two articles in the oil product law should be amended. One will make a state owned company the sole importer and restrict the private sector to the retail trade. Also we need to build an oil refinery for our own reserves of crude.

What action do you propose against companies that manipulated the shortage?

Canceling domestic oil import companies’ rights to import oil and granting it to a state owned company is our preferred option to control petrol price. If global prices rise, the state can arrange for subsidies. The plan to provide subsidy to importers in the private sector has failed.  Now we need a state company with its own capital to do the importing. The dirty and illegal business practices of importing companies have to be stopped. Take the arrangement to sell petrol only to those who bought a card for MNT 5,000.  Every time the card is used, the oil company makes MNT 200-300.  This is illegal profit. It is said there are 300,000 cars in the country, so you can guess how much money the companies made by selling these illegal cards.