OREANDA-NEWS. August 29, 2014. First Vice Minister of Energy of Kazakhstan Uzakbai Karabalin regrets that the price of gasoline AI-92 has increased. He has announced this during a briefing on current situation in the retail fuel market.

"As you know, the price of gasoline AI-92 increased to 128 tenge per liter on August 21. The prices for AI-80 and diesel fuel remained unchanged (115 and 89 tenge per liter). As for gasoline AI-95 prices, its price is not regulated by the state. I said on the previous briefing that the price will not change most probably until the end of August. Frankly, I was hoping that it will not increase. Unfortunately, we could not avoid it," U. Karabalin said.

He stressed that price increase for AI-92 happened due to several factors. "We know that in recent years there was a shortage of AI-92 in the market of petroleum products in several regions, especially in the border regions of Kazakhstan, where, to our knowledge, the flow of cars from neighboring countries has increased, including Kyrgyzstan, Uzbekistan, Tajikistan and Russia. An accident at one of the Russian oil refineries and its shutdown had its impact as well. Besides, it happened during the shutdown of our plant in Pavlodar for scheduled repair," First Deputy Minister of Energy of Kazakhstan said.

"We talked about the fact that the volume of domestic processing, unfortunately, does not cover all necessary volume requirements of Kazakhstan in gasoline and diesel fuel. Therefore, we import from Russia about 30 percent of the total needs of the domestic market. This amount was calculated for even deliveries throughout the year and since there was a risk to select more arrangement of regulations, the Government had decided to introduce restrictions and to identify a single supplier in the face of a public company last spring," he said.

He noted that, the restriction was lifted when the supply situation had been straightened at the end of July. "Meanwhile, it should be noted that there was a continuous growth of fuel prices in Russia during the second quarter of this year. The price of AI-92 grew in terms of our currency from 149 tenge in March to 165 tenge in late July. In addition, the price of diesel fuel increased from 164 to 178 tenge in Russia. Moreover, all this time, Kazakh prices remained stable at the level of 115 tenge. Imports from Russia have stopped due to this difference in the price of petroleum products. To avoid an escalation of the deficit, the Government decided to establish the price of 128 tenge per liter of AI-92. Now this should help to saturate the market with the necessary amount of fuel. At present, we continue to take all measures to stabilize the situation on the fuel market. Currently, there is 95 thousand tons of AI-92 gasoline. In the future, after completion of modernization and reconstruction works, Kazakhstan will fully meet its own needs for fuels and lubricants after 2016," he concluded. Answering journalists' questions regarding the increase of the prices for diesel fuel, Uzakbai Karabalin said that everything will depend on how the market will behave.

One of the new gas pipelines from Russia to China may cross the territory of Kazakhstan, Vice Minister of Energy Uzakbai Karabalin told a press conference.

"The Kazakh President and the Prime Minister suggested looking into the possibility of laying a gas pipeline from Russia to China via Kazakhstan's territory and discussing it with Russia. It may pass the territory of Kazakhstan near Astana," Vice Minister U. Karabalin noted.

In his words, the Russian side took an interest in this idea. "A work group is set to be formed to study the proposal thoroughly," he added.

According to him, now filling equipment with liquefied gas is being built in large networks of filling stations. "We have agreed with the major networks of gas stations, such as "KazMunaiGas" and "Helios" to put fueling equipment on their stations. You know about the "Eco Taxi" that run on LPG, and quite a lot Gazelles run on LPG in Astana. We fully support this," U. Karabalin said.