Kazakhstan’s January ban on the export of naphtha, heating oil, and marine fuel should be reconsidered, as it threatens to shut down mini-oil refineries, Muratbek Makhanov, Managing Director of the Oil and Gas Sector and Ecology at the National Chamber of Entrepreneurs (Atameken) has warned.
Since January 29, Kazakhstan has imposed an official ban on exporting gasoline, diesel fuel, and certain petroleum products, including to other Eurasian Economic Union (EAEU) member states. The restrictions cover by-products of mini-refineries such as naphtha, used as fuel for tractors, a gasoline additive, or a solvent in paint production, heating oil, and marine fuel. While Kazakhstan operates three major refineries, approximately 30 smaller facilities focus primarily on diesel production, which inevitably results in these by-products.
The issue, industry representatives argue, is that these by-products have little domestic demand and are primarily sold for export.
“The oil refining process makes it impossible to produce only diesel fuel. Other petroleum products, such as heating oil and naphtha, are unavoidable by-products that now fall under the export ban. Selling them domestically is not viable, which means we may have to suspend production entirely, leading to a diesel fuel shortage,” said Abdymanap Isabayev, a representative of one of Kazakhstan’s mini-refineries.
Isabayev proposed maintaining the export ban on diesel fuel while lifting restrictions on by-products.
His concerns were echoed by Atameken’s Makhanov.
“Restrictions on the export of refined oil by-products, such as naphtha, heating oil, and marine fuel, harm not only the financial stability of mini-refineries but also Kazakhstan’s broader economy. The government must reconsider this ban and allow mini-refineries to export these products,” he said.
Makhanov emphasized that selling surplus petroleum products abroad would generate additional export revenues, increasing budget inflows through customs duties, fees, and other charges.
Amanbai Sembekuly, another mini-refinery representative, warned that shutting down small processing plants, which primarily refine crude from marginal and unprofitable fields, could also halt oil production at those sites.
“This would be a significant loss to the national budget, which is already suffering from lower revenues due to the ban. The export customs duty on our high-sulphur oil products is 2.5 times higher than the duty on diesel fuel, so these restrictions are costing the government money,” Sembekuly said.
Kazakhstani naphtha is primarily exported to Turkey, Uzbekistan, Italy, and Greece, where it is refined into diesel fuel. According to industry representatives, similar refining processes could take place within Kazakhstan’s major refineries, but this would require setting up additional processing lines.
As The Times of Central Asia previously reported, Kazakh authorities announced at the end of January the liberalization of domestic oil product prices, abolishing 11 regulations that had controlled wholesale and retail fuel prices since 2014. The move is expected to address fuel shortages, which have worsened due to price disparities that drive fuel exports to neighboring markets.
