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Ban of Russian fuel will not cause deficit in Kazakhstan: KazMunaiGas 03 апреля 2015, 11:27

Kazakhstan has introduced a 45-day ban on import of fuel from Russia. Some are worried that this will be the beginning of a new fuel deficit in the Central Asian economy. KazMunaiGas has a different view.
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Last year oil and gas producing Kazakhstan experienced a deficit of gasoline. It created kilometer-long queues at large gasoline fuelling stations in some parts of Kazakhstan. This year many are worried that a similar situation will happen.

Fuel deficit last year was far not the first one experienced in Kazakhstan. It is a known fact that oil producing Kazakhstan heavily depends on fuel imports from Russia due to the insufficiency of supplies from its domestic refineries. 

Kazakhstan has three oil refineries: Pavlodar Petrochemical Plant JSC, Atyrau Oil Refinery JSC and PetroKazakhstan Oil ProductsLLP in Shymkent. Together they produce around 1.9 million tons of AI-92 gasoline and 4 million tons of diesel fuel. Kazakhstan’s annual consumption of AI-92 gasoline is about 2.8 million tons and consumption of diesel fuel is around 4.6 million tons. So, to cover the gap Kazakhstan has to import 40% of its fuel, mainly from Russia

Whenever disturbances of fuel imports from Russia happen and Kazakhstan has insufficient reserves, one can smell problems. Hence, the recent introduction of the ban on Russian imports raised eyebrows and fears that the system risks would resurface again.

However, to counter such fears, Deputy Director General for Marketing at KazMunaiGas – Processing and Marketing Yerlan Koibagarov claimed that the ban did not threaten the domestic market of Kazakhstan. In an exclusive interview to Tengrinews, he assured that Kazakhstan had enough fuel supplies to last without shortages until the 45-day ban expires.

Almost half of the 45-day period of the ban has passed. Refineries and storage depots of Kazakhstan had an about two-month supply of both petrol and diesel fuel. This is 415 thousand tons of AI-92 and more than 580 thousand tons of diesel fuel. Of those, 64.7 thousand tons of AI-92 and 120.5 thousand tons of diesel fuel are stored directly at the refineries.

"Given that our refineries produce 4.7 tons of AI-92 and 9.2 thousand tons of diesel fuel daily, despite the shutdown of Petro Kazakhstan Oil Products in Shymkent for a scheduled overhaul, our reserves will replenish fast enough. That is, a deficit of gasoline does not threaten us,” Koibagarov assured.

Koibagarov also said that the ban was a tactical move by Kazakhstan to avoid problems on the market later in the year. He explained that the agreed amount of duty-free oil from Russia this year was 840.2 thousand tons of gasoline A-92 and 520 tons of diesel fuel. Given that, over 350 thousand tons of AI-92 and more than 100 thousand tons of diesel fuel were imported by the end of February, Kazakhstan had to take steps to control the inflow and spread it our more evenly throughout the year.

"If those rates kept on, the entire duty-free volume would have been spent before the summer, and the disruptions of fuel supplies from Russian would have occurred in the hottest months. As a result, ordinary car owners would have suffered, as well as the country in general," Koibagarov said.

The representative of KMG stressed that the ban solved several problems: "First of all, it will stop the massive uncontrolled importation, and at the same time will partially unload the tanks and tank farms of Kazakhstan, which would enable the system to gain some operational manoeuvring capacity.”

He reiterated that Kazakhstani refineries were producing enough gasoline for the domestic market until the ban would be lifted.

“It is also important not to forget that our plants are working all the time, despite the large-scale construction work being made to modernise the refineries. With so much fuel imported earlier this year there was a glut of reserves, including refineries' storages and tank farms. And our refineries had to lowed their outputs, not by a lot, by 10-12 percent. However, this does not change the general production plan or reduce their established capacity,” he explained.

Reporting by Azhar Ashirova, writing by Dinara Urazova, editing by Tatyana Kuzmina


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