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Diesel order 60% above official price cap placed by Kazakhstan government agency 16 сентября 2014, 20:39

Tengrinews correspondent finds orders on government procurement website to buy diesel at price 60% higher than the price cap set by the Kazakhstani government.
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Kazakhstan is still experiencing fuel deficit. The oil and gas producing country had some regions feeling serious shortages with kilometer-long queues forming in places. Domestic refineries produce only 60% of the gasoline products that the country consumes, while the rest has to be imported, mainly from Russia. The Kazakh government is trying to find a solution to the problem which periodically reoccurs, especially in the high season.

Imagine the surprise of our Tengrinews correspondent when he discovered two tenders on the website of public procurement placed there by the Department of Customs Control of East Kazakhstan Oblast who were ordering to buy winter diesel fuel at a price of 195 tenge per liter including VAT ($1.07).

In Kazakhstan, the government sets caps on retail sales of petroleum products, including gasoline. And the current cap on diesel is 115 tenge per liter ($0.63).

The two tenders were placed on the website on 12 September. On September 9, it was announced that the Customs Control Committee was reorganized into the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan.

The two orders require winter diesel fuel for business needs - heating, fueling the tractor and generator for electricity. They require 110 and 140 thousand liters of diesel totaling 48.7 million tenge including VAT ($268 thousand). Delivery is expected before December 31, 2014.

In total, according to Tengrinews, 34 lots could be found on the procurement website since September 3 that offer buying diesel at prices higher than the government price cap. For example, Almaty Oblast Customs Control Department set the second highest purchase price of 172.5 tenge per liter ($0.95). Next is state-owned utility "Oskemen Water", which offers a price of 170 tenge per liter ($0.94). The same company offers the closest to the actual diesel price – 130 tenge ($0.72).

The Treasury Department of Kyzylorda Oblast of the Treasury Committee of Ministry of Finance of Kazakhstan has already purchased 88,267 liters of diesel at 175.84 tenge per liter ($0.97).

Previously, the highest known price for diesel fuel on public procurement was 201.6 tenge per liter ($1.11). But all three auctions launched by "Technical Center National Network Television", a subsidiary of JSC "Kazteleradio", were canceled due to submission of less than two applications. In total, 43 tenders setting excessive prices on gasoline and diesel were declared invalid since mid-April 2014 until August 2014. 

Reporting by Alisher Akhmetov, writing by Dinara Urazova

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