KazMunaiGas (KMG) national company and Kazakhstan Ministry of Energy plan to increase the volume of oil refining at Kazakhstan’s oil refineries by 90,000-100,000 tons, reported Novosti-Kazakhstan news agency.
“In order to saturate the local market of Kazakhstan in condition of economic inefficiency of oil products import, KMG jointly with the Kazakhstan Energy Ministry will also work to increase oil refining at Kazakhstan’s oil refineries by 90,000-100,000 tons in September 2014,” reported the company.
There are three main oil refineries in Kazakhstan, which manufacture a total of about 1.9 million tons of AI-92 gasoline and 4 million tons of diesel fuel a year. Annual consumption of AI-92 gasoline is about 2.8 million tons and diesel fuel about 4.6 million tons.
“In the past the shortage between consumption and manufacture was covered at the expense of oil products import from Russia. Every year Kazakhstan and Russia sign the indicative balance to fix the volume of fuel imported by Kazakhstan from Russia duty free. Everything imported above this limit will be liable to duty in Russia,” a source from the company explained.
Indicative balance of oil products for year 2014 is 470,000 tons of diesel fuel and 670,800 tons of AI-92 petrol, but by May 2014 306,800 tons of AI-92 gasoline has been already imported in Kazakhstan against scheduled 263,800 tons. “Without the government’s limitations in autumn Kazakhstan’s citizens would have been forced to pay a gasoline price with duty. At the end of July ban on import from Russia was lifted, because of the current market situation. However, in June 2014 oil products prices went up in Russia. In this situation it economically inefficient for the private market participants to buy Russian oil products, considering current retail prices for AI-92 gasoline and diesel fuel in Kazakhstan,” the company said.
In order to stabilize situation at the local market, KMG continues contracting for oil with Russian companies to its own detriment. In August 2014 it is planned to deliver about 10,000 tons of AI-92 and 19,000 tons of diesel fuel.
AI-92 resources at the oil bases and Kazakhstan’s oil refineries are sufficient to supply the regions within 9-10 days. Considering that daily shipment of AI-92 from Russian oil refineries is 5,500-5,800 tons, crisis is not expected at the retail fuel market in Kazakhstan,” said the same source.
From August 21, 2014 AI-93 petrol price went up in Kazakhstan by almost 11% up to 128 tenge.