Abstract
A comprehensive synthesis study of domestic national production, consumption and export of hydrocarbons has been produced for year 2021 by the Ministry of Hydrocarbons and Mining for the country of Algeria. Its further analysis carried in this present study reveals that a certain number of cost-headings such as car fuels (accounting for both petrol and LPG, among others…) but also gasoil, may profit excessively to domestic consumption especially when the differential profit and currencies are considered for domestic profit versus export. Other cost-headings can be examined, but the purpose of this current study is not to be exhaustive but to analyze the key above mentioned cost-headings. The definition of such categories as “key” contains a subjective view and encompasses not only the calorific value of diverse fuels, but also the reasonable probability of those being reduced for domestic consumption.
In a first pass, a differential between the domestic price and the export price is determined by unit of energy. It will be expressed in USD by Tep, and also in the domestic currency per Tep, DZD/Tep. The consistency between the two sets is subject to potential inconsistencies since it is debatable which type of exchange rate should be used, the official one or officious one.
As a consequence an estimate of the additional profit is being produced for the sub-categories “LPG” and “Gasoil” and “Petrol” based on an assumed saving that could be made on domestic consumption of each, together with the above mentioned differential. Here also some uncertainties and limitations are being discussed; for example a more refined estimate could be produced by comparing the cost of distribution of each domestically to the cost of exporting each Additionally the conversion factors between tons and tep for the “Petrol” could be broken down to more refined units depending on available new data.
Assumptions
Additional assumptions :
Diesel domestic price 29 DZA/L
Essence (Petrol) domestic price : 45 DZA/L
Conclusion
The most significant result bears on Gasoil (Diesel) for transport and suggests that a 10 percent decrease in Diesel domestic consumption in Algeria would result in a saving of 632 Million USD annually (starting in 2021).
The method for achieving such a result which is recommended is a gradual increase of the domestic price until this level is reached, and it is realistic.
In the case of Petrol (translated as Essence in French) for transport, for an assumed 10 percent decrease in domestic consumption only results in 57 Million USD saving. It is assumed here that this may remain within a contingency margin, and for this reason it should not be recommendable to achieve such a reduction in consumption, especially by impacting the domestic price.
It is advocate here that the Ministry of Energy and the company Naftal examine these simulations under a more exhaustive view.
GPL-c obeying the another realm with ecological considerations and a specific availability of this product, have not been examined in this study.
Bibliography
2021. Bilan Energétique National 2021. Ministère de l’Energie et des Mines, République Algérienne Démocratique et Populaire.