BAKU, Azerbaijan, April 14
Trend:
Today, an increase in retail prices for gasoline at filling stations is observed in the domestic market of oil products of the Republic of Kazakhstan, Trend reports referring to the Ministry of Energy of the Republic of Kazakhstan.
At the same time, the prices for oil products are regulated by the market, rather than the state (for gasoline since 2015, for diesel since 2016).
Earlier, the members of the Mazhilis of the Parliament of the Republic of Kazakhstan, voicing an MP's request to Deputy Prime Minister of the Republic of Kazakhstan Roman Sklyar at a plenary session of the chamber, asked to consider the issue related to price collusion and cartel agreements on the fuel and lubricants market in connection with an increase in gasoline prices.
"The oil products market is highly volatile, subject to the influence of many factors, namely, the taxation system, pricing and the provision of the domestic market of Kazakhstan and neighboring countries with fuel and lubricants (uncontrolled flow), seasonality of demand, information about technological failures or overhaul at refineries," the Ministry of Energy responded to the request.
"The abovementioned circumstances require a constant search for price "balance" for oil products," the ministry said.
"In 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 neighboring markets and in case of high prices, there may be a surplus of imported gasoline and as a result, overstocking of the Kazakh warehouses with domestic fuel, followed by a decrease in refining volumes at the Kazakh refineries," the ministry said.
"Currently, in some regions, subsoil users supply about 75-80 percent of the extracted raw materials to the domestic market, while contractual obligations are rather less,’ the ministry said.
"Taking into account the already built system of formation of state revenues and the system of protection of socially vulnerable segments of the population, there is no alternative to building the market relationships, in particular, in the fuel and lubricants trade sector," the ministry said.
"That is, it is necessary to ensure the inflow of investments into the industry, the growth of income of subsoil users, employment of the population and, ultimately, tax revenues to the budget through the market mechanisms," the ministry said. "By increasing tax revenues it is necessary to increase spending on targeted social assistance."
"Of course, we must continue to work to improve transparent pricing conditions in the market," the Ministry of Energy said.
"As for the issue of the high volatility of the fuel market, its sensitivity, undoubtedly, the information about the current repair at the Atyrau refinery and the expected planned shutdown of the Shymkent refinery for repair could affect the cost of oil products," the ministry said.
"As a tool to stabilize the domestic market of oil products, the legislation envisages the powers of the Ministry of Energy to regulate the volume of official export of oil products," the ministry said. "As part of this mechanism, the ministry has excluded the export supplies since January 2021."
The current volume of stocks of RON-92 gasoline in the country as a whole is at a good level. The stocks have increased by almost 60,000 tons up to 270,000 tons thanks to the taken measures compared to the beginning of the year.
"Taking into account the abovementioned aspects, we expect that prices on the market will be stabilized," the Ministry of Energy said.