Kazakhstan may introduce temporary ban on importing petroleum products from Russia: media reports

Kazakhstan may introduce a temporary ban on petroleum products imports from Russia; currently the imported products make up about 1.3 million tons a year, Kommersant.ru reports. “Kazakhstan’s authorities are discussing suspension of petroleum products imports from Russia. The country’s Ministry of Oil and Gas has two drafts of the Government’s resolution. The first seeks to completely ban imports of high-octane petrol and diesel fuel for half a year, the second provides for quantitative restrictions on the volume for the same period”, the publication reports. According to media reports, Kazakhstan’s KazMunaiGas National O&G Company is to be designated the role of the sole operator of petroleum products imports from Russia. Kazakhstan is facing shortages of petroleum products due to reconstruction of the country’s largest oil refineries based in Pavlodar and Shymkent, with the works only to be completed in 2016. Last year Russia exported to Kazakhstan 1.3 million tons of petroleum products exempted of exports duties within the Customs Union of Kazakhstan, Russia and Belarus. In line with the intergovernmental agreement, Kazakhstan is supposed to deliver crude to Russia in exchange. However, the methods to calculate the crude volumes are yet to be approved. “Now the methods are being ratified; Kazakhstan is supposed to deliver 1.2-1.5 million tons of crude in exchange for the petroleum products imported in 2012. The price of the crude will be lower than that of crude exported from Kazakhstan to far abroad countries [that is outside the CIS]” Kazakhstan’s Minister of Oil and Gas Sauat Mynabayev said January 29. According to him, such conditions could have an adverse impact on Kazakhstan’s budget revenues. As a result this year Kazakhstan will be substantially augmenting far more profitable tolling operations with China, with the crude to be processed in China reaching 500 000 – 600 000 tons. However, according to Mynbayev, Kazakhstan cannot substitute for all crude imports through relying on alternative ways. Today Moscow will host a meeting of Russia’s Vice PM Igor Shuvalov and Kazakhstan’s Vice PM Kairat Kelimberov. Energy cooperation is on the agenda among other things. Russia’s Gazprom Neft is the largest Russian supplier of petroleum products to Kazakhstan. Light petroleum products imported by the company to Kazakhstan in 2012 stood at over 550 000 tons. According to Alexander Karavayev, Vice Director of the Moscow State University Center for Post-soviet Studies, Astana’s moves may be driven by efforts of powerful lobbying groups that speak up for stronger cooperation with China. In general, Kazakhstan is interested in strengthening integration with Russia; “there might be some issues arising that might entail substantial tension”, he believes.