Kyrgyzstan reviews petrol purchase options

Oil&Gas Materials 22 July 2011 15:31 (UTC +04:00)

Azerbaijan, Baku, July 22 / corr Trend V.Zhavoronkova /

Kyrgyzstan is reviewing options for purchasing combustive and
lubricating materials (CLM) in Azerbaijan, Kyrgyzstan Association of
Oil Traders President Zhumakadir Akeneevtold Trend from Bishkek over
the telephone.

After talks between the two governments, a delegation led by Kyrgyz
First Premier and Minister Omurbek Babanov visited Azerbaijan late
last year to hold preliminary talks over the issue.

"However, after calculating logistics expenses to transport petrol
from Azerbaijan and Kyrgyzstan over sea, rail and onwards, the
figures were not in favor of purchasing petrol from Azerbaijan,"
Akeneev stressed.

According to Akeneev, purchasing petrol from Azerbaijan costs 30-35
percent more than petrol from Russian and Kazakhstan.

"But we put this issue on agenda. The situation may change, prices
will change and we will seek other ways of settlements," Akeneev said.
Perhaps, we will receive CLM, whilst Azerbaijan other products in
exchange. So, we will study this matter."

Akeneev said Kyrgyzstan will consider the matter as soon as it is
profitable to receive petrol from Azerbaijan.

Kyrgyzstan has faced difficulties with high-octane petrol since July 1.

The Omsk oil refinery, a subsidiary of Gazpromneft, which used to
supply the fuel to Kyrgyzstan, ceased shipping last year.

According to Akeneev, as a result, problems appeared with high-octane
petrol branded А 92, 93, 95, 98.

Kazakhstan, a member of Customs Union (CU), has called on Russia and
Belarus to cease shipping fuel out of the CU countries until the
domestic market is saturated.

As a CE member, Russia had to support Kazakhstan and the Omsk plant is
working for the domestic market despite contracts with Kyrgyzstan.

Akeneev said the overall annual demand in Kyrgyzstan is 1-1.2 million
tons depending on the state of the market.

"Kyrgyzstan does not have any problem with А-80 petrol and diesel," he
added. "The country has a 18-month storage and is awaiting for
additional receipts."

After problems arose with high-octane petrol, the Kyrgyz
representatives signed new deals with independent oil refineries in
Russia based in Bashkortostan and Tatarstan, Akeneev noted.

"Kyrgyzstan is receiving 6,500 tons of high-octane petrol, which is to
be enough for the period by Sept. 1," he underscored. "The first batch
of this volume is expected to arrive in three-four days."

However, the country has applied restrictions on fuel consumption
until the petrol arrives.

Petrol prices in Kyrgyzstan at Gazprom gas stations are stable and
cost roughly $0.70 per liter. One liter costs $0.75 at private gas