05 сентября 2015 23:42

Petrol follows tenge in free float: Kazakhstan government stops regulating prices


Photo © Turar Kazangapov Photo © Turar Kazangapov

After the announcement that Kazakhstan was stopping price regulation for petrol, Tengrinews observed a drastic price spike at local gas stations. 

After the announcement that Kazakhstan was stopping price regulation for petrol, Tengrinews observed a drastic price spike at local gas stations. 


On September 4, Vice Prime Minister of Kazakhstan Bakhytzhan Sagintayev announced the decision "to stop regulating prices for AI-92 and AI-93 petrol, two most common types of petrol". Before that Kazakhstan government used to set ceiling prices for fuel.  

After the devaluation of the tenge, Deputy Mayor of Astana Andrey Lukin promised that the currency rate would not affect the price for petrol in the capital.

In turn, Kazakh Minister of Energy Vladimir Shkolnik stated that petrol prices could go up to 140-150 tenge per litter ($0.62).

"At the moment, one barrel of oil costs $50, the currency ecxchange rate is 240 tenge (for one dollar) and one litter of petrol costs 108 tenge, meaning 40 cents for a litter. It is understandable that importing such petrol is impossible. It is clear, that petrol will go up in price. But no one knows how much the price increases. It might be 140 tenge or 150 tenge or 142-143 tenge (for a litter)," Shkolnik said.

All in all, according to Shkolnik, the situation in the petrol market of Kazakhstan was stable except when it comes to AI-92. "At the moment, we have a deficit of 1 million tons. We produce two million tons of 92nd petrol at three plants. One million - we import. Today the situation is that the price for oil we pay in Belarus and Russia or other countries is higher than the price limit established by the government. So we are facing a dilemma: we either have 92nd petrol in abundance or we face a deficit leading to a commotion in the market," Shkolnik explained.

Local gas stations were quick to increase the oil prices in a blink of an eye. The governmental meeting where state official discussed the oil prices was taking place at around 4:35 pm. KazMunaiGas petrol station displayed 108 tenge for one litter of AI-92 at the time. At 5:01 pm the price went up to 130 tenge. The price for AI-95 increased from 129 to 150. However, the prices were returned to the previous level the same day. The petrol station operators refused to comment on the sudden price increase.

The price fluctuation continued at other petrol stations of Almaty. Sinoil, Helios, RP, Gasprom and Total started selling 92nd petrol for 128 tenge.

Observing the rapid increase of petrol price, the government announced fines for abuse of dominance, price fixing and unfair business practices. Serik Zhumangarin of the Committee of Regulation of Natural Monopolies and Protection of Business Competition ordered preventing groundless increase of prices for the AI-91 petrol. "Considering the opportunity given to entrepreneurs to establish the price for AI-92/93, regional departments of the anti-monopoly agency must strictly observe adherence to anti-monopoly laws," Zhumangarin said.

 In case the prices for petrol do not correspond the expenses of the market entities, they will face fines, he said.

 After the price spike, Almaty petrol stations returned the prices to 108 tenge. However, some drivers are awaiting increase the price tonight and are buying canisters of petrol.

 As for AI-80 and diesel, the government retained the price ceiling. "“We produce enough of AI-80 petrol and diesel fuel. So we do not have issues any issues here. The AI-80 petrol costs 89 tenge while diesel fuel costs 99 tenge. The price regulations remain the same in full force,” the First Deputy Prime Minister Bakhytzhan Sagintayev said.

By Gyuzel Kamalova

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