Turkmenistan Set to Scrap Core Welfare Benefits

In a signal of a major downgrade in Turkmenistan’s generous welfare system, the Council of Elders advisory body proposed on September 10 to abolish the free supply of electricity, cooking gas and water to the country’s households, state media reported.

The plan marks the strongest indicator to date of the extent of damage being caused by falling global energy prices to an economy so heavily reliant on natural gas exports.

Supporters of the idea, which will beyond all certainty enter into force, argued that it was time for Turkmenistan to embrace market rules. The Council of Elders ostensibly serves as a would-be bridge between representatives of local communities and the central government, but it is evident that it takes its cues from the authorities. 

“For many years already, we have been using free gas, power and water. There is nothing like this welfare system anywhere else in the world. What is more, these benefits cost large amounts to the state budget, and so I think that the time has come for a charge to be imposed on these services,” said Gozel Saparmuradova, a Council of Elders deputy and teacher from the Dashoguz province.

Businessman Hudainazar Atageldiev weighed in to remind the audience of how much life had improved in recent years.

“That is why I am proposing introducing payment for the use of gas, water and electricity, which will allow private enterprises to operate more profitably in market conditions, bringing positive results to our economy,” Atageldiev said. 

Those speeches followed an address from President Gurbanguly Berdymukhamedov, who also touched on the subject.

"How long are we going to be throwing away our wealth? We should leave our descendants a legacy of natural riches, a clean environment and a strong state,” he said in remarks broadcast on state television.

Legislation on the free provision of electricity, gas, salt and water to the population was first passed in 1993 and designed to expire after 10 years. In 2003, the law was extended to 2020.

In October 2006, two months before former President Saparmurat Niyazov died, the social contract to give free gas, power and water was again renewed to 2030.

Last year, Berdymukhamedov ordered that gas meters be installed in homes as part of measures to rationalize the usage of gas, which is used by urban households primarily for cooking. That move did little to actually affect standards of living, as the gas remained free for most people.

But people in rural areas, who use gas to heat their homes and the barns where they keep their livestock, felt the pinch. Since 2014, a charge has been levied on all gas consumed beyond the monthly 50 cubic meter allowance per person. The additional gas is charged at $7 per 1,000 cubic meters.

A limit has also been put in place for electricity. A household registered as occupying 1-2 people is granted 90 kilowatt hours of free power every month. In households of three or more people, each resident is granted a monthly allowance of 35 kilowatt hours.

Turkmenistan has for several years been making a phased transition toward a market economy, even before tanking oil prices ran down the value of its huge gas reserves.

In 2012, owners of trucks, buses and tractors lost the right to free gasoline that they had enjoyed since February 2008. Under the new rules, only drivers of regular cars under 3.5 tons and motorcyclists were eligible for the free fuel — 720 liters of petrol and 240 liters of natural gas every six months.

Back in Niyazov’s day, gas cost only $0.02 a liter, making it easily among the cheapest in the world. Once Berdymukhamedov came to power he began rationing gas with coupons. 

Turkmenistan Set to Scrap Core Welfare Benefits

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