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Fuel stations owners in Kazakhstan complained about wholesale fuel prices

25 july 2011, 18:44
©RIA Novosti
©RIA Novosti
Fuel stations owners in Kazakhstan complained about wholesale fuel prices, Tengrinews.kz reports. Today, July 25, directors of fuel stations talked about controlling wholesale prices of fuel. Representatives of Helios, Aurika and Oil fuel companies held a press-conference in Astana.

“If the market is controlled, if the Law is adopted (to set a ceiling of retail prices of fuel), both prices have to be controlled, or at least the wholesale price. And we would be allowed a 10 to 25 percent mark-up,” Director of Aurika Nikolay Serebryakov said.

“We think that the Law is anti-market, because demand defines offer in any market,” he summed up.

Marketing and Sales Director of Helios Denis Trandafilov also shared his opinion: “We bear all the costs as we are retail distributors. We build fuel stations, pay salaries, while a wholesale buyer just buys fuel and re-sells it without any extra expenses.”

According to information unveiled at the press-conference, some of Kazakhstan fuel stations have fuel stock for 2-3 weeks left only. Many of them have closed down, as they don’t want to lose money.

In July Kazakhstan Government set a retail price ceiling for Ai-92 fuel at 102 tenge ($0.7). Meanwhile, wholesale price is 104-105 tenge ($0.71). According to directors, it is profitable to sell fuel when the mark-up is around 7 tenge ($0.04) per liter. According to a representative of Aurika, losses of this fuel stations network made 10 million tenge last month.

Fuel stations owners applied to the Government with a request to control wholesale prices of fuel. They say they are ready to write an open letter to the President. There is no point in raising retail prices. Directors say that they willfully raised prices of Ai-92 fuel to 112 tenge ($0.76) (in the areas where fuel stations network is not registered as a monopoly), but now Competition Protection Agency is accusing them of collusion.

“Of course, we support the suggestions made by fuel stations owners, as it is a direct violation of businessmen’ rights, that’s why we think there there should be some balance found in this issue,” said Timur Nugmanov, managing director on legal issues of Soyuz Atameken National Economic Chamber.

According to Nugmanov, management of Atameken will apply to the ministry of Oil and Gas and “possibly higher.”

Businessmen added that they do not buy fuel directly from refineries.

By Maksim Popov

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