Kazakhstan may satisfy shortage of gasoline and diesel fuel at the expense of China and Turkmenistan

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The oil refineries of Turkmenistan and China intend to undergo certification according to the standards of the Eurasian Economic Union (EAEU) in order to have the ability to supply petroleum products to member countries of the Union, including Kazakhstan, said Almasadam Satkaliyev, the Minister of Energy of Kazakhstan, Kursiv.kz reports.

"Some of the plants, as far as I know, have expressed their intention to be certified (according to EAEU standards). Among the potential suppliers of petroleum products to the EAEU territory, we see the oil refineries of Turkmenistan and China. This process is proceeding in a working manner," he said at a press conference.

Satkaliyev also reminded that oil refineries from countries outside the EAEU must be certified according to the Union's requirements.

Regarding the retail prices of AI-92 gasoline and diesel fuel, it is reported that there are plans to increase them starting in 2024. The prices for AI-92 gasoline will be raised to 230 tenge per liter from the current 205 tenge, and the prices for diesel fuel will increase to 345 tenge per liter from the current 295 tenge. There is also discussion about raising the cost of crude oil for deliveries to Kazakh oil refineries to 135-145 thousand tenge per ton from the current 95-105 thousand tenge, as stated by representatives of oil-producing organizations.

These changes in fuel and oil prices are part of a plan developed based on the recommendations of Kazakhstan's oil-producing organizations and were presented after the congress of oil-producing organizations. This plan envisions a gradual increase in prices for petroleum products and oil in the domestic market, potentially reaching levels close to Russian prices.

As a third stage in this association, there is the creation of a common market for oil and petroleum products of the Eurasian Economic Union, which could bring retail prices in Kazakhstan closer to Russian levels. Otherwise, petroleum products produced in Kazakhstan may be exported to Russia and Kyrgyzstan, neighboring EAEU members, where fuel prices are significantly higher than in Kazakhstan. In the absence of a phased increase in fuel prices, retail consumers risk seeing prices similar to or equal to Russian prices for gasoline and diesel fuel immediately after 2025, which could cause a price shock. Fuel (gasoline, diesel fuel, liquefied gas, natural gas) in Kazakhstan has traditionally been considerably cheaper than in neighboring countries (Russia, Uzbekistan, and Kyrgyzstan).

In addition, the Ministry of Energy of Kazakhstan has requested the Ministry of Energy of Russia to increase the indicative balance for the supply of AI-95 from Russia to 110,000 tons, up from the current 40,000 tons, which is a 2.75-fold increase. This request comes against the backdrop of the Atyrau Oil Refinery's scheduled maintenance from October 1 to November 3, as reported by Vice Minister of Energy Erlan Akkenzhanov in late September.

According to the official exchange rate of the National Bank of Kazakhstan, $1 equals 475 Kazakh tenge.

CentralasianLIGHT.org

October 4, 2023