Eurasian Economic Union to resolve Kazakhstan's fuel problems

The Eurasian Economic Union, according to the former head of the KazMunaiGas Lyazzat Kiinov, will have a positive effect on the situation with petrol in Kazakhstan, Tengrinews reports.

“You all know that while Kazakhstan produces over 80 million tons of crude oil, Kazakhstanis are experiencing fuel shortage. So what is the reason behind the shortage? Mainly, this is happening because we are still getting up to 40% of our fuel from Russia, and for a whole range of reasons - our government is now investigating them - the fuel from Russia was not delivered in time thanks to sluggishness of certain responsible people. All this has caused these big (fuel shortage) problem," he said.

"There is another important aspect to note. We receive the fuel free of custom duties that amount to $500 million because we are members of the same economic union (Customs Union of Russia, Kazakhstan and Belarus). Imagine these costs being added to the price of petrol and diesel fuel we use,” Kiinov, a member of the Senate said in support of ratification of the Eurasian Economic Union by the Kazakh parliament.

The Eurasian Economic Union is a political and economic union signed by Russia, Belarus and Kazakhstan on May 29, 2014 that will come into effect on January 1, 2015. All three countries have already ratified the agreement: Russia was first to complete all the procedures and ratify it last week. Kazakhstan and Belarus did it yesterday, on October 9. The Eurasian Economic Union will create a single market of 171 million people generating a GDP of 3 trillion U.S. dollars.

“Almost 80% of oil and gas that Kazakhstan exports go through the Russian territory. This is also beneficial for us, since our countries have agreed to make the pumping tariffs almost the same. There are many more examples of benefits,” the lawmaker said.

Yesterday the Minister of National Economy of Kazakhstan Yerbolat Dossayev said that by 2025 the Eurasian Union countries will create a single market of oil and oil products. The single market, then, would have not custom duties or limitations in the member-countres' mutual trade.

Reporting by Renat Tashkinbayev, writing by Gyuzel Kamalova, editing by Tatyana Kuzmina