Kyrgyzstan Business & Economy - The Times Of Central Asia

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Fuel Prices

Kyrgyzstan Extends Fuel Subsidies Amid Russian Supply Disruptions

Kyrgyzstan has extended subsidies for fuel importers through the end of 2026. Bishkek is trying to contain prices at the pump as problems in the Russian fuel market push traders to seek supplies elsewhere and make domestic refining more important. On August 26, the Cabinet of Ministers extended a temporary fuel subsidy scheme through December 31.Under the scheme, the state covers part of eligible importers’ fuel and transportation costs when the total exceeds a fixed threshold. The government also raised those fixed prices: from $860 to $960 per metric ton for AI-92 gasoline, from $950 to $1,050 for diesel, and from $575 to $650 for automotive liquefied petroleum gas. The change means importers must now absorb more of the cost themselves before receiving a subsidy. AI-92 is a lower-octane gasoline broadly comparable to regular fuel in the United States. AI-95, closer to the standard unleaded gasoline sold across much of Europe, was included in the original subsidy mechanism introduced in late May, but has now been removed from both the subsidy program and temporary price regulation. The extension keeps government support in place for another three months. On August 25, Chairman of the Cabinet of Ministers Adylbek Kasymaliev said the government had allocated 956.1 million soms, or about $11.4 million, in subsidies to companies importing petroleum products. Kyrgyzstan receives more than 90% of its imported fuel from Russia, where Ukrainian drone attacks and refinery outages have reduced available supplies. Shortages have also emerged on the Russian domestic market, prompting Moscow to tighten restrictions on fuel exports, although supplies under intergovernmental agreements, including Russia’s agreement with Kyrgyzstan, are exempt. On August 25, Reuters, citing three industry sources, reported that Russia was set to extend its ban on diesel exports by producers through September as shortages persisted and several refineries remained idle following repeated Ukrainian drone attacks. Kyrgyzstan felt the effects relatively quickly. Gasoline and diesel prices rose, while some filling stations experienced shortages of AI-95 gasoline, even as the more widely used AI-92 remained available. Fuel traders have already begun buying from farther afield. China is emerging as an alternative source of supply. After talks with Sinopec, a Kyrgyz delegation met with state-owned CNPC on August 19. The discussions focused on procedures for supplying petroleum products to Kyrgyzstan through CNPC-affiliated Kunlun Logistics. Following the talks, Kyrgyz companies signed contracts with CNPC for petroleum product supplies, although volumes, prices, and delivery schedules were not publicly disclosed. The fuel squeeze has also made an existing effort to refine more oil domestically more important. The modernization of the Junda refinery is not a new response to the current shortages: the $193.75 million project was already underway earlier this year and had previously been scheduled for completion by July 31. On August 25, the National Investment Agency signed an additional agreement with Central Asia Energy Company allowing the next stage of modernization of the Junda refinery in Kara-Balta, the country’s largest, to begin. The latest announcement did not give a new completion date. The project...

Oil Refinery

Kyrgyzstan Advances Junda Refinery Modernization Amid Fuel Supply Strain

Kyrgyzstan’s largest oil refinery, Junda in Kara-Balta, is moving to the next stage of a modernization project worth nearly $194 million. The project has taken on added significance amid problems with fuel supplies from Russia, on which Kyrgyzstan remains heavily dependent. On August 25, Ravshanbek Sabirov, head of the National Investment Agency, signed an additional agreement with China’s Central Asia Energy Company. The document allows the next stage of the Junda modernization project to begin. Once upgraded, the refinery is expected to increase petroleum output and produce fuel meeting Euro 5 standards. The official announcement confirms the start of the new phase but does not specify its individual cost. Junda, also known as Zhongda, is located in Kara-Balta, about 60 kilometers west of Bishkek. The refinery is operated by the Kyrgyzstan-registered China Petrol Company Junda, which is 99% owned by China’s Central Asia Energy Company. The remaining 1% is held by Kyrgyzstan-registered Dade Service Company. The refinery, with an annual crude-processing capacity of 800,000 tons, began operating in 2014. Production halted in early 2020, and the plant remained idle for about four years. Before the shutdown, residents of Kara-Balta had repeatedly complained about air pollution and unpleasant odors from the facility. The shutdown lasted about four years, with production resuming in 2024. A new modernization program followed. A 2024 investment agreement initially put the cost of repairs and modernization at $160 million, while the company later cited an investment of more than $167 million. An additional agreement subsequently raised the project figure to $193.75 million. The refinery’s stated processing capacity remains 800,000 tons per year. The project’s timeline, however, remains unclear. An earlier supplementary agreement called for the modernization to be completed by July 31, 2026. That deadline has already passed, yet on August 25 the parties signed another agreement allowing the next phase to begin. The National Investment Agency has not explained whether the original deadline has formally been extended. President Sadyr Japarov has previously given a different target – 2028. He also said the Chinese side had allocated about $500 million for Junda, substantially more than the $193.75 million cited in the investment agreement. It is unclear whether the two figures refer to different stages or scopes of work. Japarov has also spoken about modernizing another refinery, Kyrgyz Petroleum Company in Manas, the city formerly known as Jalal-Abad. For Kyrgyzstan, the issue is not only fuel quality. Deputy Energy Minister Nasipbek Kerimov said in July that Kyrgyzstan consumes around 2 million tons of fuel and lubricants annually and that almost 95% has traditionally come from Russia. More recent government figures put average annual demand at more than 1.5 million tons, while Japarov has said Russia currently accounts for about 90% of consumption. That dependence has become particularly visible this summer. Disruptions at Russian refineries and reduced volumes available for export have pushed prices higher. Ukrainian drone strikes, refinery outages, and strong domestic demand have contributed to fuel shortages in Russia and restrictions on exports to some markets. Rising fuel...

Artificial Intelligence

Kyrgyzstan’s NineNineSix Takes On Global AI Voice Market

In February, Kani TTS 2, a text-to-speech (TTS) model developed by Kyrgyzstani startup NineNineSix, ranked among Hugging Face’s top three trending TTS models, according to Kyrgyzstan’s High Technology Park. Hugging Face is sometimes described as the “GitHub for AI.” At $5 per million characters, NineNineSix’s listed price is lower than several paid TTS offerings from ElevenLabs and OpenAI, while Google’s range includes both cheaper and more expensive models. The company illustrates how rapid advances in AI are creating opportunities for entrepreneurs from Central Asia. NineNineSix, whose name refers to the Kyrgyz Republic’s international calling code, +996, grew out of a problem its founders encountered when using third-party pre-trained models at their previous startup. Using its own data, the team fine-tuned those models but remained dissatisfied with the results. Those models sounded robotic and were too resource-intensive and slow, creating a bottleneck. The team concluded that building its own model was the only way to achieve the quality it needed. [caption id="attachment_54711" align="aligncenter" width="1024"] Founders Ulan Abdurazakov, Nursultan Bakashov and Denis Pavlov[/caption] Not the First Try NineNineSix co-founder Nursultan Bakashov tells The Times of Central Asia: “Building our own models felt like the natural next chapter of the story we’d already started writing. In the age of AI, the only real choice is to do AI.” Bakashov founded the company in 2025 with Ulan Abdurazakov and Denis Pavlov. He and Abdurazakov had previously worked together, co-founding Makers Bootcamp with a third partner in 2019 to train people for careers in technology. Three years later, they left Makers Bootcamp to focus on AI. They became active in the Kyrgyz Republic’s AI community, organizing events and training for several years. The community now has more than 1,800 members. Their work there led to The Cramer Project, which they launched with Timur Turatali, formerly of EY and Citibank, and Pavlov, who had moved from Russia to the Kyrgyz Republic. The company developed AkylAI, which it describes as Kyrgyzstan’s first AI-powered smart speaker. The name refers to Akylai, a common female name in Kyrgyz; the element “ai” means “moon” and often appears in Kyrgyz names. In October 2023, AkylAI was named a winner in the Unicorn from KG program, run by the High Technology Park of the Kyrgyz Republic. It also took part in Draper University’s Hero Training incubation program in Silicon Valley. The following year, AkylAI was selected for the European Bank for Reconstruction and Development’s first Star Venture cohort in the Kyrgyz Republic. It was also presented at KIT Forum 2024, Bishkek’s flagship annual technology event. That year, The Cramer Project also tested CorePod, a smart speaker designed to support mental health and sleep. CorePod was intended as a global product, beginning with the United States market. The team says the company became the first Kyrgyzstani startup admitted to the LAUNCH incubator in May 2024. CorePod was later pitched to Jason Calacanis, a Silicon Valley angel investor, and featured on his This Week in Startups podcast. An upgraded version of AkylAI was presented...

Inflation

Kyrgyzstan Drafts $419 Million Plan to Curb Rising Prices

Kyrgyzstan has drafted a plan worth about $419 million to curb rising prices in 2026–2027. The authorities aim to increase food production and build reserves, but fuel imported primarily from Russia remains a major source of inflationary pressure largely beyond the government’s control. The draft was presented to the Cabinet on August 21. During the first seven months of 2026, consumer prices and tariffs in Kyrgyzstan rose by 6.7% from their December 2025 level. Average annual inflation over the same period was 10.7%. Food prices rose particularly sharply, with fresh fruit up 16% and meat products 14.5%. Lamb recorded the largest increase at 23.1%. Horse meat rose by 16%, while beef increased by 14.2%. The authorities have already intervened directly in the meat market. In March, Kyrgyzstan introduced a six-month ban on livestock exports. Temporary state controls on beef and mutton prices also applied earlier this year but expired on May 2. The plan calls for increasing the productive livestock population by at least 20,000 head. Agribusinesses will be eligible for preferential loans, while the dairy and poultry sectors will receive subsidies. Storage facilities with a combined capacity of 18,000 metric tons are planned in all seven regions. Farmers are to receive 68,000 metric tons of seed and the necessary amounts of mineral fertilizer. The government also intends to ensure sufficient wheat supplies for the domestic market and purchase another 20,000 metric tons from local producers for state reserves. The draft would establish direct supply channels for agricultural products and expand the network of retail outlets operating without intermediaries. Kyrgyzstan relies on imports for almost all of its petroleum products. Deputy Energy Minister Nasipbek Kerimov said in July that Russia had supplied about 95% of the country’s annual fuel needs in recent years, with total consumption of around 2 million metric tons. This summer, Russia’s fuel shortages worsened amid refinery outages following Ukrainian drone attacks, high seasonal demand, and transport problems. Moscow tightened restrictions on fuel exports and turned to imports to support domestic supplies. For Kyrgyzstan, the decline in Russian supplies quickly became a problem. According to the National Statistical Committee of the Kyrgyz Republic, the average price of AI-92 gasoline reached 88.24 soms per liter by August 12, around 6% above the July average. AI-95 rose by 12% to 109.24 soms, while diesel increased by 5% to 102.08 soms. The government has already raised its year-end inflation forecast to 14–15% from an earlier projection of 9%, citing rising fuel costs as one reason. The National Bank of the Kyrgyz Republic kept its policy rate at 12% on July 27. Among the external inflation risks, the central bank cited volatile global food prices and possible disruptions to petroleum-product supplies through the Strait of Hormuz. Its medium-term inflation target is 5–7%. Kyrgyzstan cannot quickly replace Russian fuel, but importers have begun seeking supplies farther afield. Kanatbek Eshatov, president of the Association of Oil Traders of Kyrgyzstan, said on August 12 that reduced supplies from Russian refineries had prompted deliveries from...

Sanctions

Kyrgyzstan Sanctions Risks Reshape Business

Kyrgyzstan is stepping up action against companies that could expose its banks and wider economy to Western sanctions. On August 18, the authorities moved to forcibly liquidate another 19 legal entities, while major banks are closing the accounts of dozens of clients deemed too risky. Bishkek has not formally joined Western sanctions against Russia, but those restrictions are increasingly determining whom Kyrgyz businesses can work with and which banks they can use to move money. The names of the 19 companies have not yet been disclosed. The authorities stated that they were selected after reviewing around 40 organizations considered to pose heightened sanctions risks. This is not the first such move. In May, the authorities ordered 50 businesses to cease operations after sanctions risks were identified. Their full names were not made public either. First Deputy Chairman of the Cabinet of Ministers Daniyar Amangeldiev said at the time that Western partners provide information about suspicious companies, which Kyrgyz authorities then investigate. He warned that sanctions against Kyrgyzstan itself could disrupt international payments and access to technology. How the Pressure Built Western scrutiny of Kyrgyz companies began well before the current cleanup. In the summer of 2023, the U.S. Treasury Department sanctioned four companies registered in Kyrgyzstan: RM Design and Development, Progress Lider, GTME Tekhnologii, and Cargoline. Washington said they had supplied Russia with electronics and other restricted goods, while Cargoline had shipped millions of dollars’ worth of foreign-made aviation equipment. The focus later expanded from goods to financial networks. In January 2025, the U.S. Treasury sanctioned Keremet Bank, saying it had coordinated with Russian officials and sanctioned lender Promsvyazbank on a scheme to facilitate cross-border transfers. In practice, U.S. sanctions severely restrict a bank’s ability to deal with American companies or use the U.S. financial system. Within days of Keremet Bank’s designation, Visa restricted cards issued by the bank so that they could be used only through Keremet’s own ATMs and payment terminals. In August 2025, the United Kingdom imposed sanctions on Grinex, Tengricoin, Old Vector, and Capital Bank of Central Asia as part of a crackdown on financial and cryptocurrency networks that London said Russia was using to circumvent Western restrictions. By early 2026, however, the risk was beginning to shift from sanctions against individual Kyrgyz companies and banks to restrictions affecting the country as a whole. During a February meeting with EU Sanctions Envoy David O’Sullivan, Amangeldiev discussed financial monitoring, sanctions risks, and greater transparency in foreign trade rather than Kyrgyzstan adopting EU sanctions itself. Bishkek was effectively trying to show that it could tackle sanctions evasion without joining the EU sanctions regime. The prospect of broader measures was already worrying businesses. Askar Sydykov, head of Kyrgyzstan’s International Business Council, said reports that the EU could use its anti-circumvention mechanism against the country were causing serious concern among businesses and government agencies. Those efforts were not enough to prevent broader action. In April, the EU used its anti-circumvention mechanism against Kyrgyzstan for the first time, prohibiting exports to...

Fuel Supply

Kyrgyzstan Turns to China as Russian Fuel Supplies Falter

Kyrgyzstan, which has depended almost entirely on Russian fuel for years, is accelerating its search for alternative suppliers. On August 17, the authorities began direct talks with China’s Sinopec. The search has become more urgent as Russian supplies have grown less reliable and gasoline prices in Bishkek have risen. Some filling stations have also periodically run out of AI-95 gasoline. Erlist Akunbekov, Kyrgyzstan’s deputy chairman of the Cabinet of Ministers, met with executives from China Petroleum & Chemical Corporation (Sinopec) in Urumqi on August 17. Representatives of more than ten Kyrgyz oil-sector companies traveled to China with him. The sides discussed direct supplies of petroleum products, including transportation and customs clearance. “Kyrgyzstan is interested in increasing supplies of petroleum products from China. This area has great potential and, I believe, represents a long-term direction for trade and economic cooperation between our countries,” Akunbekov said during the meeting. Until recently, Bishkek had little reason to change the established arrangement. Russia is relatively close and supplies petroleum products to Kyrgyzstan duty-free under agreed indicative balances within the Eurasian Economic Union. Russian fuel accounts for more than 90% of Kyrgyzstan’s imported petroleum products. From January through May 2026, Russia supplied more than 251,000 tons of gasoline and 235,150 tons of diesel fuel. Jet fuel deliveries reached 48,150 tons. But the reliability of this model has come into question amid problems at Russian refineries. Ukrainian drone strikes and refinery maintenance have reduced available supplies. Seasonal demand and export restrictions have added further pressure, while renewed attacks in late July and early August worsened the situation. By mid-August, restrictions on fuel sales were in place in at least ten Russian regions, while gasoline sales on the St. Petersburg International Mercantile Exchange had fallen by about 20% since the beginning of the month. Particularly significant for Central Asia was the strike on the Orsk refinery in Russia’s Orenburg region, near the border with Kazakhstan. The refinery, with an annual processing capacity of about 6 million tons, halted operations after an August 11 attack. Regional authorities have said repairs could take up to six months. For Kyrgyzstan, problems in Russia quickly show up at the pump. In May, a liter of AI-92 gasoline in Bishkek cost an average of 78.4 soms, or about $0.90. By August 17, the price of the country’s most popular gasoline grade had reached 87.9 soms, about $1 per liter. AI-95 was selling for 109.9 soms, about $1.25, while diesel cost 99.9 soms, about $1.14 per liter. Some filling stations have been unable to offer AI-95, while others have temporarily stopped operating. The government initially introduced price controls in late May, then partially rolled them back in July as maintaining fixed prices became increasingly difficult amid rising import costs. The search for alternatives began before the latest meeting with Sinopec. Kyrgyzstan has held talks with Kazakhstan and Belarus, while separate discussions have involved Uzbekistan. Azerbaijan and Turkmenistan have also been approached. Agreements have already been reached with Belarus for supplies of diesel and...