Kazakhstan forms necessary gasoline, diesel fuel reserves

Oil&Gas Materials 11 March 2021 17:47 (UTC +04:00)
Kazakhstan forms necessary gasoline, diesel fuel reserves

BAKU, Azerbaijan, March 11


The total reserves of gasoline and diesel fuel in Kazakhstan are at a comfortable level, Deputy Energy Minister Asset Magauov said during a briefing at the Central Communications Service, Trend reports referring to the Energy Ministry.

"As of March 5 of this year, the total stock of petroleum products is at a comfortable level. The stock for gasoline makes up 218,700 tons, which is enough to cover the country's 20 daily needs, and for diesel fuel - 306,200 tons, which will meet the demand of the domestic market for 28 days, " Magauov noted.

The vice minister also reminded the pricing mechanism for fuels and lubricants in the domestic market. Prices are formed on the basis of supply and demand, that is, they are regulated by the market and don't depend on global oil prices.

The main factors in pricing are the cost of oil in Kazakhstan (domestic prices), processing (oil refining service), taxes and excise taxes, costs for laboratory tests and additives, servicing bank loans, supply and cleaning of tanks, transportation of goods and other related expenses, he said.

According to him, prices in the domestic market for petroleum products aren’t regulated (state regulation of prices has been canceled: since 2015 and 2016 for gasoline and diesel fuel respectively) and are determined by the market based on supply and demand.

“In Kazakhstan, there are several factors that affect fluctuations in prices for fuels and lubricants: pricing in the markets of neighboring countries and Kazakhstan, as well as uncontrolled flow in areas bordering neighboring countries,” Magauov pointed out.

“The above circumstances require a constant search for price ‘balance’ for oil products. It means that the price of gasoline in Kazakhstan should not be significantly lower, or significantly higher than prices in neighboring countries,” the vice minister further said. “In the case of low prices on the domestic market, there is a threat of a deficit due to the flow of the domestic product to the markets of neighboring countries, and in the case of high prices, a surplus of imported gasoline and, as a result, the overstocking of Kazakhstan’s warehouses with domestic fuel and a subsequent decrease in refining volumes at the local refineries can take place.”

Magauov also added that the ministries of energy and agriculture have approved a schedule for the supply of diesel fuel for the spring field work. In accordance with the schedule, 380,000 tons of diesel fuel were allocated to the country’s agricultural producers.