In a report on March 5th, Almasadam Satkaliev, Kazakhstan’s Minister of Energy, stated that in 2023 consumption of liquefied petroleum gas (LPG) by the country’s domestic market rose to 2.2 million tons; an increase of 400 thousand tons (or 28%) compared to 2022.
Cheaper than gasoline, LPG is understandably the fuel of choice for vehicle owners and a sharp hike in the cost of LPG was met with nationwide objection. Mass protests staged in the western Kazakh town of Zhanaozen in January 2022 soon spread across the country and turned violent in the cities of Almaty and Astana.
According to the energy minister, the current maximum wholesale price for LPG established by the state is lower than its production cost. While production varies from 60 thousand to 70 thousand tenge per ton, the wholesale price for manufacturing plants is set at 40,320 tenge/ton excluding VAT.
“Due to the unprofitability of liquefied petroleum gas production, manufacturers are running at a loss and are unable to invest in either the maintenance or modernization of their plants,” stated the minister.
The price of LPG in Kazakhstan, between 54-86 tenge per litre depending on the region, is the lowest among former Soviet states. For comparison the price per litre in Russia is equivalent to 165 tenge; in Kyrgyzstan, 159 tenge; in Azerbaijan, 171 tenge, and in Tajikistan, 273 tenge.
To meet the immediate demands of the country’s vehicle owners, a formal agreement has been made between the Ministry of Energy and Tengizchevroil for the monthly supply of 20 thousand tons of LPG.
The national company QazaqGaz and shareholders of the North Caspian project are also poised to sign an agreement for the supply of up to 700 tons of LPG per annum from the Kashagan oilfield by the end of this year.
