Azernews.Az

By Aynur Jafarova

KazMunaiGas Onimderi (KMGO), a 100-percent subsidiary of the KazMunaiGas Processing and Marketing Joint Stock Company, is taking all necessary measures for smoothly selling of oil products at the filling stations of KazMunaiGas, and saturating the retail market of fuel and lubricants.

"Despite a negative economic impacts and risks, the KMGO concluded additional contracts with Russian companies (Bashneft, Lukoil, etc.) in August 2014 to import 34,000 tons of oil products, including 10,000 tons of AI-92 gasoline, 5,000 tons of AI-95 gasoline, and 19,000 tons of diesel fuel," KMGO said on August 29.

Oil products will be imported to Kazakhstan between late August and early September 2014.

Thus, some 6,200 tons (62 percent) of AI-92 gasoline out of the planned 10,000 tons and 9,400 tons (28 percent) of diesel fuel out of the planned 34,000 tons have already been shipped.

"Aside from the abovementioned amounts of oil products, Kazakhstan additionally needs to import about 176,000 tons of oil products in September, including 140,000 tons of AI-92 gasoline, and about 36,000 tons of diesel fuel to meet the increased demand," KMGO noted.

The preliminary talks with a number of Russian companies have already been completed, and the possibility of additional imports of 50,000 tons of AI-92 gasoline and 35,000 tons of diesel fuel in September is being studied.

In general, the balance of oil products in Kazakhstan has not changed, so the measures taken by the KMGO and other market participants, should lead to the stabilization of situation in the retail market of fuel and lubricants and the removal of restrictions on delivery of oil products, particularly AI-92 gasoline.

Asset Magauov, the CEO of the KazEnergy Association, believes after the national currency's devaluation, the cost of imported fuel rose caused a decrease in fuel and lubricants imports, and resulted in their shortage in Kazakhstan.

Speaking at the association's meeting held on August 29 with the participation of representatives of Kazakh Energy Ministry, National Chamber of Entrepreneurs, KazMunaiGas National Company, Kazakhstan Fuel Association, and the wholesalers and retail distributors of fuel and lubricants, Magauov said Kazakh oil refineries do not meet all the needs of the domestic market and about 35-37 percent of needs in light oil products are met through imports from Russia, namely 74,000 tons of AI-95/98 gasoline, 578,000 tons of AI-92/93 gasoline, 28,000 tons of AI-80 gasoline, and 378,000 tons of diesel fuel.

Magauov went on to add that there is a restriction on the import of fuel and lubricants from Russia.

"But now, the restriction on the import has been lifted, and all companies can import fuel and lubricants to Kazakhstan," Magauov noted.

Kazakhstan has taken all the necessary measures to regulate the fuel and lubricants needs by studying all the possible consequences - both positive and negative.

"In order to limit the import, the government has decided to appoint a single operator with the right of import, represented by the KMGO," he said, adding that KMGO, which was appointed by the government as a single operator at that time, suffered losses due to negative difference between purchase prices and selling prices at the filling stations.

Currently the AI-92 gasoline costs 159 tenge per liter ($1 - 182 tenge) and the diesel fuel costs 171 tenge per liter at Russian filling stations.

Despite this, the government was strongly keeping retail prices at the same level to provide population with low price 'social fuel.'

Magauov also noted Kazakh market is heavily dependent on imported Russian fuel and lubricants.

"Thus, with the increasing fuel and lubricants prices in Russia, the decision to raise the AI-92 gasoline's cost was logical. This was necessary to stabilize the situation and decrease the difference between the wholesale prices in Russia and Kazakhstan," Magauov stressed.