Gasoline Shortage Persists in Uzbekistan
The gasoline shortage that began worsening in Uzbekistan in September is persisting, causing long lines at the gas pump and inducing people to switch to methane gas fuel systems, ferghana.ru reports.
Gas stations have already closed Sundays due to the shortages, and while there is gasoline available on Mondays, within a few days it begins to run short, causing lines to form early in the morning. Some people have already spent from $670-900 adapting their cars to take methane gas for fuel, which is cheaper than gasoline.
The Uzbek government has not explained why there are shortages, prompting much speculation that the problem is related to the seizure of Zeromax, a large conglomerate that went bankrupt in May of this year. According to one version of the story circulating, Zeromax already began to show signs of trouble earlier, when staff were fired or sent on forced vacations. Zeromax was said to have made arrangements to get fuel from Kazakhstan and deliver it across the border quickly without hassle, says ferghana.ru.
"When Morodil Jalolov was there, everything worked fine, there was always gasoline, not like it is now," taxi drivers in Tashkent told ferghana.ru, referring to the director of Zeromax, who was arrested in September.
Some ferghana.ru readers in the comments to the article on fuel shortages have pointed out that the scarcity in Uzbekistan may have been induced by Kazakhstan’s decision to halt petroleum exports for a time. According to a report on zakon.kz citing the news agency Novosti-Kazakhstan, Astana decided to impose an annual ban on export of fuels and lubricants during the planting season until July 1, due to domestic needs.
Another version of the story says similarly that Zeromax enjoyed easy imports from Kazakhstan, but when it was raided, and debts were left to Russia's Gazprom, they had to be addressed. First, a deal was allegedly floated to compensate Gazprom by giving Zeromax shares to two large joint ventures in which Gazprom participated 1) Gissarneftegaz, which was created in 2005 by Zeromax and and Uzbekneftegaz to drill for new oil and gas, and 2) Kokdumalak Gas, created in 2004 by Zeromax and Uzbekneftegas to utilize associated gas at the oil and gas condensation plant in Kashkadarya.
President Islam Karimov then may have decided he did not want to give Russia these shares, fearful of further Kremlin involvement in Uzbekistan's energy economy. Instead – goes the theory -- he decided to bankrupt Zeromax and turn the shares over to Uzbekneftegaz and also the two related joint ventures. A bankruptcy case was opened on September 7 in Kashkadarya province economic court, at the initiative of tax authorities, says ferghana.ru. The first hearing October 25 resulted in a decision to extend the external management period for a month. No details were available, and the involvement of Gazprom was not mentioned or confirmed.
With officials remaining silent, ferghana.ru says it is hard to tell what is going on, but it seems likely that Zeromax was bankrupted in order to transfer its shares from one entity to another, apparently Uzbekneftegaz, and then to send the tax claims against the already-bankrupted company to Switzerland, where it was registered.
Russia realized it was being cut out -- and at a time when the tariff on exports were being raised anyway due to the recently-created customs union among Russia, Belarus, Uzbekistan and Kazakhstan. So reportedly Gazprom pressured Kazakhstan to stop exporting gas and crude oil to Uzbekistan, causing the shortage. Except for Kazakhstan, there is nowhere else to get crude oil, and it is too expensive to bring to Russia.
Uzbekistan itself produces oil from more than 200 deposits but it is highly impure, and requires more investment to refine -- and now after the Zeromax affair, finding investors will be difficult. Uzbekistan essentially ended its declared "oil independence" in 2005 when it began to import crude, mainly from Kazakhstan. But since then, oil extraction has fallen, even as gasoline consumption has risen.