The Ministry of Energy intends to revoke the orders on state regulation of fuel prices, reports a correspondent from the business information center Kapital.kz.
The draft order on the "Open NPA" portal explains that currently, gasoline and diesel prices in Kazakhstan remain among the lowest in the world. This results in a significant price gap, particularly with neighboring countries. For instance, the price of AI-92 gasoline per liter in Kazakhstan is 205 tenge, while in Russia it is 288 tenge, in Kyrgyzstan it is 385 tenge, and in Uzbekistan it is 489 tenge. Diesel fuel costs 295 tenge per liter in Kazakhstan, compared to 355 tenge in Russia, 427 tenge in Kyrgyzstan, and 528 tenge in Uzbekistan. The price difference for AI-92 gasoline ranges from 40% to 138%, and for diesel fuel, it ranges from 20% to 79%.
“This provokes shortages, hinders the modernization of the industry, and leads to the illegal export of fuel abroad through various schemes. In this regard, the Ministry of Energy is shifting towards a policy of a sustainable pricing model. This aims to create a market balance between supply and demand, eliminate fuel shortages, stimulate the modernization of the oil refining sector, create new jobs, and attract long-term investments,” the draft states.
The Ministry of Energy clarified that the key principles of this policy are the smoothness and predictability of any changes. The agency's press release emphasizes that “the government will not allow a sharp increase in fuel prices.”
“To protect citizens' interests, social support measures will continue, and agricultural producers will have guaranteed access to diesel fuel through transparent schemes and at acceptable prices. The Ministry of Energy, together with relevant authorities, will enhance market control, ensure compliance with legislation, and guarantee uninterrupted fuel supplies to the domestic market,” the agency notes.
The explanatory note to the draft order specifies that currently, state price regulation has resulted in Kazakhstan becoming the country with the lowest fuel costs among neighboring states, leading to high risks of fuel flows and "gray" exports of petroleum products, provoking shortages.
“The necessity for a phased liberalization of prices, with a primary focus on supporting socially vulnerable groups, is driven by: fuel flows and "gray" exports of petroleum products; the economic viability of oil development projects and the expansion of the largest oil refineries in Central Asia from 18 to 28 million tons per year, which will create new jobs and support budget programs,” the explanatory note states.
The appendix to the draft lists the documents that the agency intends to revoke. These are orders from 2014, 2015, 2016, 2023, and 2024.