Fuel prices can be lowered in Kazakhstan: Expert

Fuel prices can be lowered in Kazakhstan, KazTAG reports citing deputy director of the Center for Analysis of Public Issues Kanat Berentayev. “Decrease of prices for petrol, diesel fuel and fuel oil is quite realistic not only theoretically, but also practically,” expert said. According to the economist, Kazakhstan oil refineries have to be loaded with Kazakhstan's own oil, first of all. “This requires reactivating such thing as royalty. But the method used to calcluate royalty rate in Kazakhstan contradicts with the essence of the poyalty payment itself. At current oil production volume we could load almost 2/3 of the whole refinery capacity with our own oil, that we would be receiving as the royalty,” he said. Berentayev also suggested improving tax legislation to enable excess profit tax. “In this case local oil prices would go down and the government will stop referring to growth of global oil prices,” Berentayev said. He also mentioned that it is necessary to nationalize strategic industries and increase local production of oil products. “Kazakhstan fuel prices will reach and even exceed prices in Russia, if the government does not realize the necessity of strict adjustment of prices and rates of strategic goods and services, including fuel, energy, public utilities,” Berentayev summed up. In August most of the regions in Kazakhstan faced fuel shortage that spurred fuel prices over the limit fixed by the Government for August. Besides, many post soviet countries also felt the deficiency of popular AI-92 gasoline. According to the Ministry of Oil and Gas, the retail price ceiling for AI-92 has been set to 106 tenge ($0.73). Minister of Oil and Gas Sauat Mynbayev said that the price limit will not be raised in September.