Fuel deficit in Kazakhstan is there to stay: Vice-Minister

Covering the entire fuel deficit in oil and gas producing Kazakhstan is impossible. This is what First Deputy Minister of Energy Uzakbai Karabalin said at a briefing organized by the Central Communications Service, Tengrinews correspondent reports.

The official said that Kazakhstani oil refineries were fully loaded and produced as much as they could, which was 250 thousand tons of gasoline a month. He said that the demand for top-selling AI-92 in Kazakhstan constituted 280 thousand tons and Kazakhstan could only produce 186 thousand tons of that type of gasoline. “But as you know, one-third is imported from Russia,” Karabalin said.

He noted, however, that there were problems in Russia too, where an accident at the Achinsk refinery and the Fall repair works at several other plants have decreased volumes of fuel produced.

In addition, Karabalin said that shortages were caused by the fact that Russia had to supply to Crimea. “And in the end there is a distress on the Russian market in terms of what they can give to other countries, including us," the Deputy Minister said.

Moreover, Karabalin said "a sizeable difference" in the prices of the Kazakh and Russian AI-92 made imports from Russia very unprofitable.

"In order to provide the market with fuel, we decided entrusting KazMunaiGas with supplying fuel to the Kazakhstani market at a loss. Negotiations were held with many companies. As of today, agreements have been reached to import 69 thousand tons of gasoline. Of these, 9,600 tons have already been delivered, 9,700 have been loaded into tanks for shipment, and 200 tons are already on their way,” the Deputy Minister said.

“There is lots of pressure on the domestic market; our plants cannot provide even the contracted volumes, so KazMunaiGas has held negotiations in other places as well. Currently there are talks on import of petroleum products by an Azerbaijani company, also from Turkmenistan. Nevertheless, covering the entire deficit is not possible at present," Karabalin informed.

He said that this situation made the government come to an understanding there was a need to postpone the scheduled maintenance at Shymkent refinery to February-March-April. "In addition, we expect September to be busy, the harvesting campaign is going to finish in October and the remaining volumes to be supplied to the market. Thus, we expect that we will be able to ensure a stable operation, if not an abundance," he said.

Karabalin then assured the government has decided not to raise gasoline and diesel prices caps. It is to remain at the present mark.

Kazakh government raised gasoline price caps on August 21. The prices on diesel spiked 12.7%, on AI-80 and AI-92/92 - 11.3% in one step. This change was the first one since November last year.

Reporting by Assemgul Kassenova, writing by Dinara Urazova