BAKU, Azerbaijan, September 25. Free pricing of fuel in Kazakhstan is expected to help reduce the illegal outflow of fuels and lubricants from the country, stabilize supply markets, and reduce shortages, Rassul Abdukhalilov, CEO of the Kazakh company RV-Oil&Gas, said at the “Caspian and Central Asia - Refining, Petrochemicals, Trade and Logistics” event in Baku, Trend reports.
"This will also create an additional incentive for the development of exchange trading and the expansion of the network of petrol stations in remote regions. Regarding the impact on the regional market, deregulation is expected to lead to a gradual price alignment with neighboring countries," he also said.
In his analysis, this will catalyze an increase in market
arbitrage opportunities within transboundary zones.
Proximal territories adjacent to Russian hydrocarbon processing
facilities will perceive them as pivotal suppliers, and conversely,
those facilities will regard these regions as integral
consumers.
"Consequently, we can anticipate a reallocation of resource streams
based on a substitution framework: for instance, hydrocarbons and
lubricants originating from Russia will be directed towards
northern Kazakhstan, whereas petroleum products from Kazakhstan
will be channeled to Central Asian markets." This initiative will
optimize supply chain expenditures and, as a result, lower both
wholesale and retail pricing structures across Central Asia,"
Abdukhalilov elucidated.
He observed that Kazakhstan executed a deregulation of the pricing
mechanisms for gasoline and diesel in February of the current
fiscal year.
This represents a pivotal milestone in the trajectory of systemic
market transformations for the nation.
Concurrently, the pricing dynamics of fuel in Kazakhstan exhibit a
comparative advantage, positioning it as the most economical in
relation to adjacent nations. This scenario engenders a myriad of
challenges, notably the illicit transference of fuel across
borders.
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