Uzbekistan wants to double gas price for Tajiks

Business Materials 22 December 2008 16:20 (UTC +04:00)

Uzbekistan, a major Central Asia gas producer, wants to charge neighbouring Tajikistan twice as much for its gas from next year despite falling global gas prices, a senior Tajik official said on Monday.

Gas, its annual contract price usually negotiated at the end of the year, is a thorny issue in the former Soviet bloc and has sparked broader diplomatic rows in the past, reported Reuters.

A big price jump would represent a challenge for cash-strapped Tajikistan, already struggling with energy shortages, falling work remittances from crisis-hit Russia and growing social discontent with the government.

"Uztransgas (Uzbek state gas transport company) has notified us that next year they plan to sell gas to us at a price of $300 per 1,000 cubic metres," Fatkhiddin Mukhsiddinov, head of the Tajik state gas company, told Reuters by telephone.

"To be honest, we were surprised and disappointed by this figure because energy prices are falling everywhere due to the global economic crisis."

Uzbek officials could not be reached for comment. By comparison, Ukraine paid $179.50 per 1,000 cubic metres of Russian gas this year and hopes for a price cut from 2009.

Persian-speaking and poorer Tajikistan has long had tense relations with Uzbekistan, a country rich with natural resources where people speak a Turkic language.

Tajikistan, which has a long border with Afghanistan, relies on Uzbek gas to power its sole aluminium smelter which generates most of its hard currency revenues. Uzbekistan, on the other hand, relies on Tajik hydro power to water its cotton industry.

Tensions over gas prices and other issues have worried Western nations which see stability in Central Asia as key to maintaining regional security and developing safer alternative supply routes for NATO equipment heading to Afghanistan.