Transition to gas pumps in Kazakhstan complilcated, gasoline deficit remains09 september 2014, 19:56
The ongoing deficit of gasoline has caused a stir in Kazakhstan. Many were wondering how was it possible for the oil and gas producing country to experience the lack thereof. In Uralsk, a city in Kazakhstan’s West, fuel deficit was particularly acute with kilometer-long queues forming before major gasoline pumps of the city. One man even staged a solitary protest in front of the Oblast administration building by parking his car at the entrance and leaving a writing on the windshield that said “No gasoline”.
The authorities are looking for a way to solve the problem not just temporarily, but in the long-run. One proposition is to convert vehicles in Kazakhstan to using natural gas. The idea is supported in the Ministry of Energy of Kazakhstan. Vice-Minister of Energy Uzakbai Karabalin, ex-Minister of Oil and Gas, said so himself on 27 August 2014. The Vice-Minister said that there are agreements with major companies on placing liquefied gas pumps at their stations.
"First pumps have already been installed in some places. We need more interest at the market. But our Ministry have announced the program and we are supporting it," Karabalin said.
According to the Energy Ministry there are 466 fulling stations that have gas pumps in Kazakhstan, a country the size of Western Europe.
"The Ministry signed a memorandum of understanding in regards to use of gas as motor fuel with large fuelling companies that lead the Kazakhstan market in March this year. (...) In performance of the memorandum KazMunaiGasOnimderi (Kazakhstan national fuel distribution company) planes to reequip 21 KazMunaiGas filling stations 6 regions of the country," the Ministry of Energy told Tengrinews.
Well-known Kazakh ecologist Mels Eleusizov said the environmental benefit of the transition would be enormous. "The environmental situation would improve, since gas is eco-friendlier. They should transition, it is cheaper than gasoline and the costs are only associated with the conversion (of vehicles). We must carefully calculate everything," he said.
Nevertheless, mass transitioning to gas is not possible in a short span of time. Sergey Smirnov, an independent oil industry expert, believes this will become possible only in 2017.
"There are four million cars in Kazakhstan. Of them, only 12 thousand are using gas. I think that even if we assume that half of them - two million vehicles - do the transition, we would still have the same story with gasoline - there will be a deficit. Besides, we don’t have enough natural gas even now. For example, the South of the country is covered with imported Uzbek gas,” the expert explained.
Analysts of the Agency for Research on ROI believe that converting all cars in the country is altogether impossible. "Complete transfer of cars to gas could work only if they are limited to separate enterprises, for example, in the following categories: bus parks, public and private taxi companies, corporate enterprise vehicles. Personal initiative of individual drivers concerned about reducing fuel costs is also possible. However, talking about mass transitioning is premature," the Agency said.
Mass transitioning would also be hard to achieve due to the costs associated with it. The head of the Independent Automobile Union of Kazakhstan Eduard Edokov said the conversion of passenger cars may reach 180 thousand tenge (around $1,000), or even more depending on the type of vehicle and equipment. The price can even climb to three thousand dollars, since modern gas equipment can cost anywhere between 200 and 300 thousand tenge ($1,000-1,650).
In addition, each automobile reconstruction requires permission of the manufacturer.
"If the manufacturer, such as Toyota or Mercedes Benz, says it is possible and there are authorised dealers for auto-reconstruction and our authorities allow this, then driving on gas is permissible. In all other cases, it is at one’s own risk,” Edokov said.
He added that primary manufacturers would have long started serial production of automobiles running on gas if it was easy. But it has not happened even though the technology was invented several decades ago. “Therefore I am sure that converting petrol engines to gas can be dangerous, not to mention the lack of infrastructure at fuel pumps,” Edokov concluded.
Reporting by Assel Satayeva and Azhar Ashirova, writing by Dinara Urazova