Astana, Kazakhstan, Sept.18
By Daniyar Mukhtarov - Trend:
A member of the parliament of Kazakhstan, Rauan Shaekin made a request to the country's Prime Minister Karim Massimov while addressing the plenary meeting of Majlis (lower chamber) Sept.17.
He emphasized the lack of state regulation in the wholesale market of petroleum products have led to imbalance in prices for fuels and lubricants.
"What's going on in the country's wholesale market of petroleum products? There is a lack of wholesale trade regulation in the market; no monitoring is held by relevant structures. Wholesalers can easily manipulate the market," Shaekin stressed.
At the same time, the MP underscored that currently, the state regulation is effective only in the retail market.
Under the law 'On state regulation of production and turnover of certain types of petroleum products', the country's Ministry of National Economy set price limits on Aug.21 for the retail sale of petroleum products (including VAT): diesel fuel - 115 tenge per liter, AI-80 - 89 tenge per liter, AI-93 - 128 tenge per liter ($1=181.95 tenge).
"That's to say, the prices for the AI-92 and AI-93, have increased by 11.5 percent, while the prices for diesel fuel and AI-80 remained unchanged and as a result, averagely, the prices for all types of fuels and lubricants increased by 4 percent," the MP said.
He also reminded that the annual consumption of AI-92 gasoline is 2.8 million metric tons, diesel fuel - 4.6 million metric tons.
In total, three refineries of Kazakhstan (Atyrau Refinery, Pavlodar Petrochemical Plant and PetroKazakhstan Oil Products) annually produce 1.9 million metric tons of A-92 and 4 million metric tons of diesel fuel.
He also recalled that the deficit is covered by supplies from Russia carried out by KazMunaiGas Onimderi.
"However, KazMunaiGas Onimderi's activity has not been described in the information of the public bodies since its establishment," he said. "When the company supplied the volumes from Russia to Kazakhstan, a kind of fuel, regions of supply, market (wholesale, retail) were unknown. That's the activity is not transparent. There was no stability. The situation was as always. The oil and gas minister convinces people that the prices will not increase till November, but it turned out vice versa."
The MP believes that the state regulation of energy prices is not the best option. There must be competition.
"But as the energy price is included in the cost of all goods and services, we must pay attention not only to the retail sale, but the wholesale," he said. "Wholesale is always cheaper than retail. This is an axiom in trade relations. But our wholesale price on lubricants of all kinds is by 10 percent more than retail price. This affects the production of all goods and services."
Kazakhstan's KazMunaiGas National Oil and Gas Company is holding negotiations with the State Oil Company of Azerbaijan (SOCAR) to purchase fuels and lubricants, Kazakhstan's First Deputy Energy Minister Uzakbai Karabalin said at a press conference in Astana on Sept.16.
"Thereby, Kazakhstan intends to cover the shortage of petroleum products in its domestic market," Karabalin said, adding that the country also holds talks with Russia and Turkmenistan to purchase fuels and lubricants.
The deputy minister went on to add that it has been agreed to import around 690,000 metric tons of gasoline to Kazakhstan, stressing that to date, only 9,600 metric tons of gasoline has been imported to the country, 9,700 metric tons of gasoline was shipped from the country and 200 metric tons of gasoline is yet to be delivered.
Karabalin underscored that one third of the fuels and lubricants consumed in Kazakhstan is imported from Russia.
"However, currently, there is a difficult situation in Russia, as its Achinsk refinery has just now started full production after the accident. Additionally, scheduled repair work started in several Russian refineries in autumn."
He stressed Russia started to deliver a part of its petroleum products to Crimea from 2014.
"Thus, the Russian market faces a tense situation with fuels and lubricants and therefore, they will not be able to supply fuels and lubricants to other countries as it was before," Karabalin added.
The first deputy minister underscored that the significant difference in prices for fuels and lubricants in Kazakhstan and Russia also prompted Kazakhstan to turn to its neighbors (Azerbaijan and Turkmenistan).
"The price for one liter of AI-92 gasoline is 128 tenge in Kazakhstan, while it is equal to 160 tenge ($1=182 tenge) in Russia. The price for one liter of diesel fuel is 115 tenge in Kazakhstan, versus 170 tenge in Russia," Karabalin said, adding that so, few companies and individuals will be able to purchase Russian oil products at such high prices.
The deputy minister stressed that it has been decided to postpone the scheduled repair at the Shymkent refinery (south Kazakhstan) to February or March or April of 2015, in order to provide the domestic market with fuels and lubricants.
Karabalin said it is planned to produce around 250,000 metric tons of gasoline of all brands, including, AI-92 gasoline (186,000 metric tons) in September 2014, adding that the market demand for this gasoline brand is 280,000 metric tons.
"September has always been a tense month, but the harvesting campaign is coming to an end and the volume of diesel fuel used during the harvesting campaign will soon be delivered to the market again," the deputy minister said and expressed hope that the country will manage to eliminate the shortage of oil products.
Three large refineries - Pavlodar refinery, Atyrau refinery and Shymkent refinery - operate in Kazakhstan and their total processing volume nears 13 million metric tons.
Edited by CN
