Oil and Gas Minister voices underlying reasons behind fuel shortages

Oil and Gas Minister Sauat Mynabayev voiced two underlying reasons for fuel shortages in Kazakhstan, KazTag Agency reports. "…this summer we did face and still do face some shortages of petrol. The major underlying reason is difference in price in Kazakhstan and neighboring Russia (…) Russia was supposed to shift to Euro-3 emission standards from September 5, 2011. This would mean Russia-based oil refineries would no longer be able to produce and sell AI-80 and AI-92 petrol”, Mynbayev said in his recent interview for Kazakhstanskaya Pravda. “It seems introduction of the Euro-3 emission standard in Russia may be postponed. If this happens, we will have a price time-out. If not, we will have to pay a higher price for petrol meeting the Euro-3 standard”, he said. Another reason behind the price hikes, according to Mynbayev, is the new law regulating production and sales of petroleum products. Supplies were suspended until the new regulation system settled in. The Minister also said that Kazakhstan-based refineries shifted towards greater production output of heavy petroleum products. According to him, “it is quite understandable, given that exporting light petroleum products to states outside the Customs Union of Kazakhstan, Russia and Belarus is prohibited, whereas there is no prohibition on exports of heavy petroleum products”. August 23 the Minister had said “there will be no significant shortages of petrol”. However, he didn’t specify what exactly “significant shortages” mean. It was reported earlier that since the start of the year petrol price had grown by 17.4%, with prices set by oil refineries growing by 23%. Retail prices for diesel fuel have grown by 20% since the start of the year. Besides, Tengrinews.kz reported that In January – July 2011 petrol production in Kazakhstan had dropped 16% as compared to the like period of 2010.