New Kazakhstan PM targets energy sector: Update

Market: Crude oil, LPG, Oil products
12/01/22

Adds details on pricing and other measures in paragraphs 2-4

Kazakhstan's new prime minister Alihan Smaiylov identified priorities for the energy sector at today's first meeting of his government, which was appointed in the wake of the violent unrest that swept the country last week.

He ordered development of measures for regulating the oil products market. Protests against rising prices for LPG — widely used as motor fuel in Kazakhstan — were the starting point for last week's upheaval.

At the meeting, new energy minister Bolat Akchulakov confirmed LPG prices have been temporarily frozen at 50-75 tenge/l (11-17¢/l), that maximum wholesale prices have been imposed, and that electronic trading of LPG has been suspended until 1 January 2023. High prices in recent exchange sales were blamed for the sharp rises in retail prices that prompted the recent protests. The government will also introduce measures by the end of January "to further improving the trading of LPG", Akchulakov said.

He confirmed the retail motor fuel price caps ordered by President Kassym-Jomart Tokayev last week have been applied. These set the price of A-80 gasoline at 89 tenge/l, A-92/93 at 182 tenge/l and A-95 at 215 tenge/l. Diesel prices are set at 230-260 tenge/l.

"Medium-term" measures will be adopted, including increasing gaps between maintenance at refineries and reducing the length of maintenance periods, as well as creating a 200,000t oil product reserve. Maintenance schedules for the country's refineries will be "harmonised" — back-to-back maintenance at plants has led to product shortages in the past.

Smaiylov said proposals for excise taxes on gasoline producers and intermediaries should be developed within a week. And he ordered the economy ministry and other government agencies to develop proposals for reform of the Samruk-Kazyna sovereign wealth fund, which holds the state's stakes in shares in oil and gas firm Kazmunaigaz, Kazakh Railways and other companies.

By John Gawthrop

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