Kazakhstan considers opportunities to change oil processing scheme and sale of oil products
The Kazakh Ministry of Energy and Mineral Resources held a meeting to discuss the change of oil processing scheme and sale of oil products in the country to control prices for fuels and lubricants on domestic market, the representative of KazMunayGas (KMG) national company told Trend .
"The key issue of the meeting is to remove large number of mediators who lead to high prices and to allow the Kazakh state to regulate retail market," an official of KMG said.
One of the ways to solve the problem is the change of oil processing system in
"Presently, there are only two schemes in the world: Profit-center and Cost-center. Biggest companies operate on the first variant in the most countries worldwide.
The difference is that plants buy raw materials and sell them upon the first variant. These are so-called vertical-integrated systems, when price policy from the oil well to filling stations is concentrated in disposal of one company.
Upon the second variant plants operate on oil and get income only for processing. The enterprise having got an output is not responsible for further operations of oil products.
"Any plant must have certain volumes of raw materials to pass to the first scheme which progressive countries use. A situation which can be called as a situation of dependence occurred at all three local refineries," KMG specialist on oil processing said.
Shymkent refinery processes about 50 percent of Russian oil. Atyrau refinery being in national company's ownership and processing Kazakh oil has dual position.
"First, a principle of vertical-integrated company does not work here as since KMG's transfer to IPO the national company does not own 40 percent of oil extracted from Uzen and Emba company's fields," the interlocutor said.
Second, Atyrau refinery gets oil from more than 40 private companies, he said.
"It is necessary to give an opportunity for our three refineries to buy raw materials avoiding the situation of dependence. But plants do not have necessary great funds because of lack of means to improve production," KMG representaive said.
Funds are also necessary to buy raw materials, he said. Plants must take loans in banks to get funds but they should calculate their assets on this regard.
"Moreover, transfer to Profit-center system entails change in legislative acts. Great period of time is required in this regard. So, the issue to change existing scheme of processing and sale is under discussion, the representative of the national company said.
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