Central Asia Running on Empty as Gasoline Shortages Bite

Gas-guzzling Kazakhstan – where the jeep has long since overtaken the horse as the favored means of transport – has been urged to save fuel, as a months-long gasoline shortage continues to distress drivers across Central Asia.
 
On September 2 Energy Minister Vladimir Shkolnik urged the people of his oil-rich country to cut back on consumption, suggesting carpooling and downsizing to small cars from the road-hogging jeeps his compatriots favor.
 
Kazakhstan is entering its third month of gasoline shortages, with long queues forming in many cities at filling stations, some of which have unilaterally imposed rationing.
 
The minister’s remarks caused a storm of protest on social media, as Radio Azattyq reported, prompting users to question if Shkolnik would be driving his neighbors to work and wonder where all the oil their country pumps is going, if not into their tanks.
 
As with so many of Kazakhstan’s economic woes these days, the answers to Kazakhstan’s fuel conundrum lies over the border in Russia, where rising prices mean Kazakhstani importers can no longer afford to buy fuel to sell at home.
 
This is due to the devaluation of the tenge in February, which has priced importers out of the Russian wholesale market, Aset Magauov, head of the Kazenergy industry association told Bnews on August 29. With prices at the pump controlled by the state in Kazakhstan, retail prices fell lower than wholesale prices in Russia, making imports uncompetitive.
 
In a bid to address the shortage, the government raised the price of 92 octane from around 63 cents per liter to 70 cents on August 21, but shortages persist. There were no queues at a gas station in downtown Almaty on the evening of September 4. But, an employee explained, that was because petrol could only be purchased after 4 p.m. using a pre-paid voucher obtained from the company’s head office (while before 4 p.m. gas is on sale without restrictions).
 
If Kazakhstan could refine enough of the oil it pumps from the ground, the problem would disappear. But it lacks refining capacity and depends on Russia for about a third of its needs. Upgrades of Kazakhstan’s three refineries are under way, but will not be complete until 2016.
 
Meanwhile, the effects of price rises in Russia and the shortage in Kazakhstan are rippling across Central Asia.
 
Petrol shortages have been noted in Uzbekistan, where gasoline is reportedly being sold on the black market at far above the state-set price.
 
In Kyrgyzstan fuel prices have risen by 15 percent since the start of the year and are expected to increase by another 5 percent this month. And in Tajikistan 15 importers appealed to the president, Emomali Rahmon, on September 4 to intervene to prevent a looming gasoline shortage which they blamed on restrictions on exports from Russia.