Fuel crisis grips Uzbekistan
Thursday, Nov 23, 2017
Uzbekistan is in the grip of another fuel crisis, with some parts of country reportedly left without any supplies of gasoline.

While the Central Asian republic has regularly experienced fuel shortages since its independence, the latest crisis appears more acute than in previous years. Authorities are taking measures to alleviate the situation, which comes as Uzbek leader Shavkat Mirziyoyev nears his one-year anniversary of being elected.

State information website prodrobno.uz reported on November 14 that only filling stations in Tashkent and in the immediate area around the Uzbek capital were still receiving stable deliveries of gasoline.

Government-run television channel Uzbekistan 24 reported that there were severe shortages of the fuel just 50 km from the city, while in some provinces there was no gasoline at all.

Podrobno blamed a rise in the number of “speculators” selling gasoline illegally for exacerbating the crisis. The website noted that the fuel was being sold on the black market at between 4,000 and 5,500 som (US$0.49-0.68) per litre, depending on the region, compared with a government-set price of 2,800 som (US$0.35).

Uzbekistan’s Cabinet of Ministers looked to address the crisis on November 15, ordering a price hike of over 30% for all types of gasoline. The price of AI-80 gasoline was raised to 3,800 som (US$0.47) per litre, whereas the price for AI-91 climbed to 4,300 som (US$0.53).

A similar measure was taken last year. The latest decree also raised the price of natural gas by 10% and electricity by 12%, effective from April 1, 2018.

Last week Mirziyoyev ordered the Finance Ministry to lend 2 trillion som (US$250 million) to Uzbekistan’s three oil refineries in Bukhara, Alty-Arik and Ferghana before the end of 2017 to pay for higher gasoline and crude oil imports. Until January 1, 2020, Uzbek companies importing raw hydrocarbons will be exempt from customs payments, while oil refineries will receive a holiday on income tax.

Uzbekistan possesses some 600 million barrels of proven oil reserves, although production has continued to decline in recent years, averaging 60,000 bpd in 2015, down from 108,000 bpd a decade earlier. This has made it difficult for the country’s refineries to secure enough feedstock. Under Mirziyoyev, the government has struck contracts with Russia, Kazakhstan and Turkmenistan for oil supplies.

On November 15, Kazakh pipeline operator KazTransOil (KTO) announced the costs and tariffs for transporting Russian oil to Uzbekistan until December 31, 2017. Around 30,000 tonnes (220,000 barrels) of Russian oil are expected to flow through the Omsk-Pavlodar-Shymkent pipeline and then be loaded on to railway tankers for delivery to Uzbekistan before the end of this year. In a second statement this week, KTO noted that Kazakhstan had received the first batch of Russian oil for shipment to its southern neighbour.
 
This NewsBase commentary is from our FSU OGM publication. To sign up for your free trial, click this link: http://newsbase.com/publications/fsuogm-former-soviet-union-oil-gas

Read more NewsBase top stories via this link: http://bit.ly/2h95NUx

Find out more about Asian Oil and Gas from NewsBase