KAZAKHSTAN SEEN RISE IN PETROLEUM AND DIESEL PRODUCTION
Petroleum production has grown by 84%, while that of diesel seen a rise by 36% due to the modernization of Kazakh refineries, resulting in a surplus of gasoline across the republic. At the same time, the government limited the export of oil products across the Kazakhstan border, but continues to export fuel, including to European countries, Finreview.info reports.
In 2018, after the modernization of the country’s largest oil refineries was completed, Kazakhstan’s producers for the first time in a long time managed to satisfy the needs of the domestic market in excess. According to KazMunayGas, three Kazakhstan’s refineries are capable of producing 24% more gasoline than market needs, and the closest deficit will occur no earlier than 2032. Gasoline production after modernization of the refinery increased by 84%, diesel by 36%. Jet fuel, in turn, produces three times as much.
In Kazakhstan, the production of gasoline, including aviation, monthly increases by an average of 12%. 3.6 million tons of fuel were produced in the ten months of 2019. The growth compared to the same period in 2018 was 12.4%. At the same time, in September 2019, domestic refineries produced a record volume of gasoline 465.6 thousand tons. Compared to September 2018, volumes grew by 22.8%, and by the results of three quarters by 14.7%.
The largest volumes of output fell to the city of Shymkent 1.5 million tons of gasoline were produced, or 42.5% of the total output. The region has the newest refinery in the republic. 30% of gasoline production was provided by the Pavlodar petrochemical plant, and 26.7% was provided by the Atyrau refinery.
Increased production volumes allowed to reduce imports to a minimum if in January August 2018, imports amounted to about 590 thousand tons, then over the nine months of 2019 it decreased to 18.7 thousand tons. However, the share of gasoline exports is only 0.3%.
In addition, gasoline consumption decreased in the country for the seven months of 2019, 2.33 million tons were sold on the domestic market, which is 12.8% less than in the same period in 2018. That is, the volume of unsold gasoline is increasing in the country.
It is also known that in January-September, 32.6 thousand tons of gasoline were exported, of which 1,827 tons of K5 class gasoline had already been sent to Europe. The Ministry of Energy plans to supply another 35,606 tons to the European market only in November this year.
At the same time, in order to prevent a shortage of gasoline on the domestic market in August 2019, the order On some issues of the export of petroleum products from the territory of the Republic of Kazakhstan was adopted. According to the document, a ban was introduced on the export of gasoline, diesel fuel and other certain types of petroleum products.
The indicated measure affected the level of oil products shipment. In September, the shipment of AI-92 gasoline from the RK refinery to the regions amounted to 391 thousand tons, then in October the volume of shipment amounted to 354.5 thousand tons, that is, 35.5 thousand tons less.
For example, the volume of deliveries to the Almaty region decreased by 20.2 thousand tons in comparison with the month of August and by 37.8 thousand tons in comparison with September. Deliveries to Eastern Kazakhstan decreased by 11 thousand tons in comparison with August and by 17.7 thousand tons in comparison with September. This may indicate that some of the gasoline was exported to the border territories, and the ban worked.
In 2018, Minister of Energy Kanat Bozumbayev noted that in the WKO and Kostanay regions, where about 700-800 thousand people live, the consumption of fuels and lubricants is several times higher than in the south of the country. At the same time, a total of about three million people live in the Turkestan region and Shymkent.
Over the past five years, the cost of gasoline increased by 30%
In 2014, after a global drop in oil prices, the cost of fuel in the countries of the Customs Union increased from 112 to 115 tenge per liter. In late August, a shortage of fuel appeared on the market and in order to prevent price increases, the Government adopted an order according to which the cost of AI92 gasoline amounted to 115 tenge per liter.
Already in January 2015, prices fell to 105 tenge per liter. In February, the decline continued and AI92 gasoline began to be traded at 99 tenge.
However, in September 2015, the Government decided to abolish the regulation of gas prices due to the inability of domestic refineries to independently provide the domestic market with fuel and the transition to a floating tenge exchange rate. As a result, the price per liter of gasoline increased from 108 tenge to 129 tenge per liter.
Subsequently, the growth trend continued in 2016 the price increased to 135 tenge, in 2017 up to 143 tenge.
As a result of modernization of oil refineries, a surplus of own fuel appeared in the country, and prices decreased monthly by 0.5%. If in January 2018 the cost of gasoline was 159.4 tenge per liter, then already at the end of the year it decreased to 154.85 tenge, and in November 2019 amounted to 148.49 tenge. After increasing the excise tax by 10 tenge from January 1, 2020, the price will rise again.
As of early July 2019, in the ranking of European countries in terms of fuel availability for the population, Kazakhstan became the leader among 33 countries in terms of cost, which amounted to 169.35 tenge per liter of AI95. After changing the excise tax, the Republic of Kazakhstan will remain the leader, since Russia is in second place with a price of 276.19 tenge, and Belarus is the third, where a liter of fuel cost about 315.64 tenge.
However, Kazakhstan takes 18th place in terms of gasoline availability for the population. According to a study on the average wage of Kazakhstan people, 843.5 liters of gasoline can be purchased. According to this indicator, the TOP-3 countries include Luxembourg, Norway and Austria, and the lowest rates are in Romania, Bulgaria and Ukraine.
Source: Kazakhtan 2050