Kazakhstan, a former Soviet state in Central Asia, is increasingly challenging Russia’s oil dominance in the region, Vestnik Kavkaza writes in an analysis of Central Asian oil sector developments.
Kazakhstan will limit its imports of Russian gasoline products starting on Saturday, citing a surplus in its refineries as a reason for the temporary measure. The move is seen by some as a sign of Astana’s growing ambitions in oil trade, although Kazakhstani officials claim all its oil sector decisions are made in dialogue with Moscow.
Kazakhstan imports about a third of the fuel it needs – 900,000 tons a year – from Russia. Historically, Kazakhstan also imported about 400,000 diesel fuel and 250,000-270,000 tons of aviation kerosene. Recently, after three oil refineries in the country were modernized, costing Astana more than $6 billion, Kazakhstan has begun to fully meet its needs for high-octane fuel – Euro-4 and Euro-5 brands and even produced surpluses. Therefore, it was decided to reduce the supply of Russian A-92 gasoline, to stop it from competing with the domestic product.
According to Kazakh Energy Minister Kanat Bozumbayev, “the volume of own fuel was predicted, therefore, we see no point in importing large quantities of Russian gasoline.” The minister said this issue was discussed with Russian colleagues in advance while noting that Kazakhstan and Russia work within the framework of joint balances, which are approved by both parties.
Kazakhstan intends to sell surplus gasoline into the markets of Central Asian countries. According to the minister, before doing this, it is necessary to obtain Moscow’s consent.
“Kazakhstan’s Ministry of Energy has been waiting for documents from the Russian side for already two months to agree on the beginning of gasoline exports to Central Asia. Kazakhstan is working actively to start fuel exports to Central Asia,” the minister said.
Given the current utilization rate of oil refineries “gasoline reserves in the country will amount to 600 thousand tons by October” and Kazakhstan will be forced to “stop the production of gasoline or reduce factories utilization rate,” the minister stressed.
Daniyar Tiesov, deputy chairman of the board for the transportation, processing, and marketing of oil at the Kazakh national company KazMunayGas, told Vestnik Kavkaza that this year they plan to export up to 400 thousand tons of fuel to Kyrgyzstan, Uzbekistan and Tajikistan. In 2019, the volume of supplies is expected to increase to 1.2 million tons.
