Kyrgyzstan Business & Economy - The Times Of Central Asia

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Fuel Imports

Fuel Squeeze Leaves Kyrgyzstan Competing for Costly Alternatives

Kyrgyzstan is moving to secure alternative fuel supplies from China and Belarus as disruptions in Russia’s refining sector expose Bishkek’s dependence on a single supplier. The new arrangements may ease immediate pressure, but they also show how costly and limited Kyrgyzstan’s options remain. First Deputy Chairman of the Cabinet of Ministers Daniyar Amangeldiyev said China has confirmed a contract to supply the first 3,000 tons of jet fuel, while negotiations are under way for an additional 5,000 tons of diesel fuel. The government has also signed agreements with Belarus covering 3,000 tons of jet fuel and approximately 10,000 tons of diesel. On July 1, the Council of the Eurasian Economic Commission (EEC) extended the zero customs duty regime within the Eurasian Economic Union (EAEU) for gasoline, diesel fuel, aviation fuel, marine fuel, and other petroleum products for another year. EEC Minister of Trade Andrey Slepnev said the previous zero rates had expired on June 30 and that proposals from several member states to extend them were quickly coordinated. “The zero rates have been extended for another year,” he said. That buys time but does not remove the main risk. Russian refining disruptions, seasonal demand, and export controls could still reduce the flow of petroleum products to Kyrgyzstan. Imports from alternative suppliers are also likely to come at higher prices and on less favorable terms than those traditionally offered by Moscow. Russia has been Kyrgyzstan’s primary fuel supplier for decades. The country began receiving Russian petroleum products at preferential prices on October 10, 2000, when the prime ministers of Russia and Kyrgyzstan, Mikhail Kasyanov and Amangeldy Muraliev, signed an intergovernmental agreement in Astana governing indirect taxation in bilateral trade. Since then, Kyrgyzstan has received basic petroleum products duty-free at domestic Russian prices. In 2011, then-adviser to the Kyrgyz prime minister Farid Niyazov told the news outlet 24.kg that Russia would supply all petroleum products to Kyrgyzstan indefinitely without export duties, except aviation fuel. “At present, Russia’s export duty on these fuel products is $245 per ton. You can imagine how much we would otherwise have to pay for fuel,” he said. The 2000 bilateral agreement was terminated in 2015 after Kyrgyzstan joined the EAEU. Since then, the country has operated under the union’s common customs rules as well as bilateral agreements with Russia. This has left Kyrgyzstan heavily dependent on a single supplier. According to official statements and industry estimates, more than 90% of the country’s fuel consumption for households and agriculture is currently covered by Russian imports. Despite Russian Deputy Prime Minister Alexander Novak’s assurances that domestic fuel reserves remain sufficient, shortages began to emerge in Russia in early June. Russia has since moved to tighten exports further as refinery disruptions have continued. As a result, Kyrgyzstan’s Cabinet of Ministers has begun searching for alternative suppliers while introducing daily monitoring of existing fuel deliveries. Rising gasoline and diesel prices had already prompted the government to introduce temporary state regulation of motor fuel prices in late May. It has since rolled...

Fuel Supply

Kyrgyzstan Eases State Fuel Price Controls as Supply Shortages Persist

Kyrgyzstan has partially rolled back its temporary state regulation of motor fuel prices, removing AI-95 gasoline from price controls and abandoning plans to impose maximum retail fuel prices in an effort to stabilize supplies. As previously reported by The Times of Central Asia, the Kyrgyz government introduced temporary state regulation of fuel prices on May 25 amid continued increases in gasoline and diesel prices, driven largely by the country’s dependence on imports from Russia. The government had approved subsidies for imports of gasoline, diesel fuel, and liquefied petroleum gas through September 30, 2026, while setting benchmark import prices at $860 per ton for AI-92 gasoline, $940 per ton for AI-95 gasoline, $950 per ton for diesel fuel, and $575 per ton for liquefied petroleum gas. Under a new resolution signed on July 7 by Chairman of the Cabinet of Ministers Adylbek Kasymaliev, AI-95 gasoline has been removed from the list of socially significant goods subject to temporary state price regulation. The decision effectively cancels the state price controls introduced just two weeks earlier. It follows reports that AI-95 gasoline had disappeared from several filling stations in Bishkek. The July 7 resolution also abolishes the maximum allowable retail fuel prices established under the May 25 decree. According to the government, the changes are intended to ensure uninterrupted fuel supplies to consumers. The policy adjustment comes as Russia continues to tighten fuel exports. In recent weeks, several Russian regions have imposed restrictions on gasoline sales following reduced refinery output caused by Ukrainian drone strikes on oil-processing facilities. Moscow has already restricted gasoline exports and imposed a temporary ban on jet fuel exports. Kyrgyzstan remains heavily dependent on imported fuel. The country imports approximately 1.2 million tons of petroleum products annually, while domestic refineries meet only about 5% of national demand. Total annual fuel consumption is estimated at 1.6 million tons, with more than 90% supplied by Russia. First Deputy Prime Minister Daniyar Amangeldiyev told the 24.kg news agency that the government is actively diversifying fuel imports through negotiations with Turkmenistan, Uzbekistan, European suppliers, Türkiye, China, Russia, Belarus, and Azerbaijan. According to Amangeldiyev, China has confirmed a contract to supply the first 3,000 tons of jet fuel to Kyrgyzstan, while negotiations are underway for an additional 5,000 tons of diesel fuel. The Kyrgyz government has also signed agreements with Belarus covering 3,000 tons of jet fuel and approximately 10,000 tons of diesel fuel. The reversal shows how quickly price controls can collide with supply constraints in a market still heavily dependent on Russian fuel.

Fuel Exports

Kazakhstan Weighs Kyrgyz Fuel Request as Export Ban Extension Looms

Kazakhstan is considering Kyrgyzstan’s request for gasoline supplies following an official appeal from Bishkek, Deputy Energy Minister Kaiyrkhan Tutkyshbayev has said. At the same time, the Kazakh government plans to extend its ban on fuel exports until May 2027. In late June, Russia, which supplies around 90% of Kyrgyzstan’s fuel imports, imposed a full ban on exports of gasoline and jet fuel. In early July, Kyrgyzstan’s Ministry of Energy announced that it had begun negotiations with several countries to diversify fuel imports. Speaking after a government meeting on July 7, Tutkyshbayev confirmed that Kazakhstan had received an official request from Bishkek. “We have received an official request from the Kyrgyz side, and it is currently under consideration,” Tutkyshbayev said. “All decisions will be made with due regard to Kazakhstan’s national interests and domestic market balance. However, I can state officially that fulfilling such a request would not lead to higher fuel prices within Kazakhstan. We will review the request in the near future and provide our response.” The deputy minister did not specify the volumes requested. As previously reported by The Times of Central Asia, Kyrgyzstan has also sent official requests to the relevant authorities in Russia, Belarus, Azerbaijan, Uzbekistan, and Turkmenistan as part of efforts to secure alternative fuel supplies following Russia’s export restrictions. Tutkyshbayev also said Kazakhstan’s Energy Ministry had not received an official Russian request for fuel supplies, despite Reuters reporting earlier that Moscow was in talks to import about 50,000 metric tons of AI-92 gasoline from Kazakhstan after refinery outages and drone strikes cut Russian gasoline output by roughly 25%. Tutkyshbayev acknowledged a sharp increase in gasoline consumption in Kazakhstan’s three regions bordering Russia, West Kazakhstan, Pavlodar, and Aktobe, which may indicate cross-border fuel flows. “Some motorists install additional fuel tanks on their vehicles,” he said. “We are monitoring the situation closely, and together with other government agencies we have stepped up efforts to combat the illegal export of fuel from Kazakhstan.” Meanwhile, Kazakhstan is preparing to extend its existing ban on fuel exports from November 22, 2026, until May 22, 2027. A draft order published on the government’s Open NPA portal would prohibit exports of gasoline, diesel fuel, and certain petroleum products by road and rail, including shipments to fellow members of the Eurasian Economic Union. The draft also proposes a separate ban, from January 1 through June 30, 2027, on exports outside the Eurasian Economic Union customs territory of light distillates, jet fuel, diesel fuel, gas oil, toluene, xylene, and petroleum bitumen. The proposed restrictions underline the tension in Kazakhstan’s fuel policy: Astana wants to protect its domestic market in the short term, even as it plans major oil and petrochemical investments and has set a long-term goal of increasing fuel exports.

Energy Security

Central Asia’s Fuel Squeeze Becomes a Winter Energy Security Problem

Central Asia’s fuel squeeze is moving from filling stations into winter planning. Governments are now tracking gasoline and diesel, gas pipelines, coal deliveries, power imports, jet fuel, and emergency repair crews. Seasonal fuel and power stress is familiar across the region, but the current pressure - tied to Russia, the main supplier for several regional fuel flows - has arrived early. Russia’s own fuel crisis has sharpened the risk. Ukrainian drone attacks and repair work have cut refinery output, while export limits have pushed more Russian supplies back into the domestic market. Reuters reported queues, regional restrictions, and gasoline above 100 roubles a liter at some independent stations. President Vladimir Putin acknowledged the strain on June 28. “You are well aware that problems for drivers and for businesses persist,” he said, adding that “the harvest depends on” keeping seasonal fuel schedules for farms. For Central Asia, Russian shortages travel through contracts, rail slots, import prices, and public nerves. Kyrgyzstan is among the most exposed. The country consumes about two million tons of fuels and lubricants each year, and almost 95% comes from Russia, according to Deputy Energy Minister Nasipbek Kerimov. “Due to the lack of adequate oil and gas production, we remain a country dependent on imports,” Kerimov said. Bishkek has asked Russia, Kazakhstan, Belarus, Azerbaijan, Uzbekistan, and Turkmenistan for help securing supplies. That dependence is now impacting households, farmers, and small transport firms. The cabinet has capped pump prices and set a subsidy mechanism through September 30. Kerimov said importers were seeing offers at several prices, but promised that “there should be no shortage on the domestic market.” Oil traders put AI-92 stocks at 30 to 45 days, while diesel remained available for harvest work. Kyrgyzstan is trying to buy time through domestic refining. The modernized Junda refinery in the Chuy Region has been pressed to raise gasoline output to 24,000 tons a month soon, then 50,000 tons a month by the end of 2026, with finished products directed to the domestic market. Those gains would help, but Russian supply still sets the pace. Uzbekistan has the Bukhara and Fergana oil refineries, the Altyaryk unit of the Fergana refinery, and the Uzbekistan GTL complex, but demand has still moved faster than domestic supply. In January-April 2026, gasoline imports reached 568,700 tons, worth $327.1 million, more than double the same period in 2025. Local refineries produced 417,500 tons over those four months. A shift away from AI-80 gasoline has also pushed drivers toward AI-92 and AI-95. The pressure reached the exchange in late June. AI-92 gasoline climbed to a record 13.919 million soums per ton on June 29, about $1,160, after an 11.8% rise since the start of the month. Jet fuel has become an issue, too. Uzbekistan Airways reduced some Russia flight frequencies in June, citing aviation fuel shortages and higher costs. Tashkent is now preparing for winter in concrete volumes. On July 6, President Shavkat Mirziyoyev reviewed measures for the 2026-2027 autumn-winter season. The plan includes replacing 53.7...

New Air Route

Direct Flights Between Tashkent and Lake Issyk-Kul Launched

Kyrgyzstan’s state-owned Asman Airlines will launch a seasonal direct service between Tashkent and Lake Issyk-Kul on July 8, expanding transport links between Kyrgyzstan and Uzbekistan during the peak summer tourism season. The route is being introduced in partnership with Uzbek tour operator Malva Tour and is intended to make travel to Kyrgyzstan’s largest resort area more convenient for visitors from Uzbekistan. Flights will operate once a week, every Wednesday, arriving at Issyk-Kul International Airport in the village of Tamchy on the lake’s northern shore. The journey will take approximately one hour and 20 minutes. Round-trip fares start at $160, according to Asman Airlines. Lake Issyk-Kul, one of Central Asia’s most popular summer destinations, attracts visitors from across the region with its mountain scenery, beaches, and resort infrastructure. The new route is expected to strengthen tourism ties between the neighboring countries by reducing travel time and improving direct access to the lake. Uzbekistan remains Kyrgyzstan’s largest source of international visitors, accounting for more than 40% of all inbound foreign tourists each year. Visa-free travel, close geographic proximity, and relatively affordable holiday costs have made Kyrgyzstan a popular destination for Uzbek travelers. The launch of the new route reflects broader efforts by Central Asian countries to improve regional connectivity and capitalize on growing cross-border tourism as travel demand continues to recover.

Tamchy Special Financial Investment Territory

Kyrgyzstan Launches Tamchy Financial Zone to Attract Foreign Capital

Kyrgyzstan officially inaugurated the Tamchy Special Financial Investment Territory (SFIT) on July 3 on the northern shore of Lake Issyk-Kul, marking the launch of a new investment zone designed to attract foreign capital and position the country as a regional financial and business hub. Located near the village of Tamchy and close to Issyk-Kul International Airport, the SFIT operates under a separate legal framework aimed at attracting domestic and international investment, improving Kyrgyzstan's investment climate, and supporting growth in manufacturing, tourism, wellness services, and transport infrastructure. The zone also features an independent international dispute resolution center operating under English common law. The Tamchy SFIT covers approximately 6,000 hectares. Companies registered within the zone will operate under English common law, benefit from a zero-tax regime for 49 years, and be allowed to repatriate 100% of their profits. Speaking at the opening ceremony, President Sadyr Japarov expressed confidence that the Tamchy SFIT would become a regional and global investment platform. "According to forecasts, the project will gradually gain momentum, and by 2035, more than 3,900 resident companies are expected to operate in this investment territory, creating over 10,000 new jobs," the president said. Japarov also pointed to the project’s economic impact. "When companies enter the financial investment territory, they bring new orders for builders, suppliers, transport companies, hotels, restaurants, service organizations, farmers, and entrepreneurs. Thus, this project provides jobs for our people, new opportunities for businesses, and new sources of economic growth for the state," he said. The president said the zone’s legal and regulatory framework draws on the experience of several leading international financial centers. He named Dubai and Singapore, and also cited Luxembourg. "We've adopted proven models from these countries' experience and sought to combine them with the national advantages of the Kyrgyz Republic, the unique location of Lake Issyk-Kul, and our human potential," Japarov said. A central feature of the new investment zone is its independent International Center for Dispute Resolution operating under English law. "This important step will significantly enhance trust in the project and make the SFIT's legal framework one of its key competitive advantages," the president said. Japarov also stressed that economic development in the zone would not come at the expense of the environment. "The development of the Tamchy special territory will be carried out with full consideration of the lake's conservation requirements and its unique natural environment. Issyk-Kul is a natural gem, our national treasure, and a symbol of the country. Whatever projects are implemented in the Tamchy special territory, they will be carried out only in compliance with environmental requirements and under strict oversight," he said. During the ceremony, the president presented certificates to the first five resident companies representing the UAE, Hong Kong, Switzerland, Kazakhstan, and South Korea. The organizers also announced registration fees and licensing costs for companies operating in the zone. Company registration within SFIT will cost a minimum of $525, while registration of investment funds starts at $975. According to the organizers, businesses operating within SFIT will be able to...