BAKU, Azerbaijan, June 4
Trend:
The main pipelines in Kazakhstan, through which the internal gas supply of the country is carried out, has completed their service life and have many supercritical defects according to the results of diagnostic examinations, Trend reports citing the press service of the Ministry of Energy of Kazakhstan.
The service life of 70 percent of the gas infrastructure, which is of strategic importance in ensuring energy security both in the context of regions and on a national scale, exceeds 40 years, the ministry said.
According to Kazakhstan’s legislation, the state regulation of the wholesale price of commercial gas is carried out by the Ministry of Energy, the retail price - by the Ministry of National Economy.
“To contain the final cost of gas in the domestic market, KazTransGas JSC annually subsidizes the domestic market of the country through gas exports. For 2015-2020, the value of losses of the National Operator from subsidizing the domestic market approached 425 billion tenge,” the message said.
As the ministry stated, the last time the maximum prices for wholesale of commercial gas were adjusted on January 1, 2019, then they were reduced in the range from 3.8 to 17.5 percent depending on the region and did not increase until now.
“Currently, the approved maximum wholesale prices for commercial gas for the domestic market are lower than the prime cost of supplied gas. In various areas, the approved wholesale price is 1.5 to 2.5 times lower than the cost price,” the message reads.
“In this regard, if marginal prices for wholesale of commercial gas were set at the current level, the costs of the National Operator would increase in the future, and failure to implement investment programs could ultimately lead to an increase in the number of supercritical defects in gas pipelines, which could lead to irreparable damage in the future for the country,” the ministry stressed.
“Based on the foregoing, the maximum prices for wholesale of commercial gas in the Kazakh domestic market have been approved for the period from July 1, 2021 to June 30, 2022. According to this order, the maximum wholesale prices have been increased by an average of 11 percent depending on the region,” added the ministry.