Fuel Exports - The Times Of Central Asia

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Energy

Kazakhstan Enforces Fuel Export Ban

Kazakhstan’s Ministry of Energy has confirmed that the country’s six-month ban on fuel exports remains in full effect, with no gasoline shipments currently sent to Uzbekistan or other neighboring countries. Officials acknowledged a single exception earlier this year, when surplus volumes of AI-92 gasoline were exported to Uzbekistan in the spring. The ministry characterized the shipment as a routine measure aligned with international practice, designed to optimize domestic storage and increase tax revenues. Since June, all fuel exports have been suspended to build strategic reserves ahead of scheduled maintenance at Kazakhstan’s oil refineries. The ban, introduced on May 19, covers gasoline, diesel, and other petroleum products. Reports of Fuel Shortages and Smuggling Speculation over renewed fuel shortages in Kazakhstan surfaced in local media on September 22, with reports citing illegal cross-border smuggling as a contributing factor. Some sources also claimed that Uzbekistan had increased purchases of Kazakh gasoline amid a decline in fuel imports from Russia. In response, the Ministry of Energy reiterated that no current fuel exports are taking place and emphasized that the export moratorium is being strictly enforced. Uzbekistan’s Fuel Market in Transition Uzbekistan’s state energy company Uzbekneftegaz recently announced plans to phase out production of AI-80 gasoline starting in September. Beginning in 2026, the country intends to supply only higher-octane grades, including AI-92 and AI-95, to align with international fuel standards. The regional fuel market has already undergone significant restructuring. In April 2024, the Telegram channel Oil & Gas of Kazakhstan reported that Uzbekistan was scaling back crude oil imports from Kazakhstan in favor of cheaper Russian supplies. During the first quarter of 2024, Uzbek companies imported 15,200 tons of crude oil from Kazakhstan by rail, down from 25,600 tons during the same period in 2023. Most of this volume was refined at the Ferghana plant. Meanwhile, Russia’s Gazprom Neft significantly expanded deliveries to Uzbekistan. In the first quarter of 2024, the company shipped 75,000 tons of crude via pipelines through Kazakhstan, nearly seven times more than the 10,700 tons delivered a year earlier.

Fuel Exports

Central Asia Grapples with Fuel Shortages Amid Market Volatility

The heavy reliance on fuel imports from Russia is placing Central Asian countries in an increasingly precarious position. Disparities in pricing and exchange rates are driving a surge in illicit fuel resales, exacerbating supply challenges across the region. Gasoline and diesel prices continue to climb, and shortages are being felt widely. This dependence on Russian supplies is particularly concerning following U.S. President Donald Trump's ultimatum to Moscow: end the war in Ukraine within ten days or face 100% tariffs on countries trading oil and petroleum products with Russia. The tariffs could take effect as early as next week, placing Central Asian states in a hugely vulnerable position. Kazakhstan: Shortages and Shadow Exports In early July, motorists across Kazakhstan reported widespread shortages of AI-95 gasoline, particularly along the Karaganda-Balkhash and Astana-Pavlodar highways and in the country’s western regions. Some filling stations restricted purchases of AI-95 to 30 liters per vehicle, and AI-98 was only available via coupons. The Ministry of Energy attributed the shortages to increased tourist and transit traffic. Price caps on gasoline were lifted in January 2025, after which they began to steadily rise. According to the Ministry of Energy, fuel in Kazakhstan remains significantly cheaper than in other Eurasian Economic Union (EAEU) member states, prompting the government to gradually align prices with the regional market. Forecasts suggest gasoline prices could rise by up to 50%, further fueling inflation and impacting all sectors of the economy. The government argues that maintaining artificially low fuel prices would require substantial budget subsidies. The resulting price differentials have made illegal fuel exports more profitable, aggravating domestic shortages. To combat speculation, Kazakhstan imposed a ban in January on exporting gasoline and diesel by road and rail. Despite the country’s ongoing efforts to expand domestic production, Kazakhstan is expected to import substantial volumes from Russia in 2025: 285,000 tons of motor gasoline, 300,000 tons of jet fuel, 450,000 tons of diesel, and 500,000 tons of bitumen. Experts caution that significant increases in domestic output may not materialize until 2030. Russia’s decision on July 28 to tighten its gasoline export ban to include large producers is further complicating the situation. The embargo, introduced amid record-high exchange prices, is expected to last through August. Nevertheless, Energy Minister Erlan Akkenzhenov insists the Russian export restrictions will not affect Kazakhstan, citing a standing intergovernmental agreement that exempts the country from such measures. The Rise of Grey Market Schemes Despite official reassurances, fuel prices continue to rise. Energy expert Olzhas Baidildinov warns of a growing shadow market, driven in part by the weakening of the Kazakh tenge against the Russian ruble. With the exchange rate at 6.6 tenge per ruble, the economic incentive for illicit exports from Kazakhstan remains strong. Baidildinov predicts further shortages by the autumn if this trend continues. Kyrgyzstan: Growing Dependence Kyrgyzstan, which has faced repeated fuel shortages in recent years, has seen prices rise sharply. Over the past decade, the cost of AI-92 has climbed by 52%, AI-95 by 57%, and diesel, used in agriculture...

Fuel Exports

Kazakhstan Plans to Export Up to a Third of Its Fuel Production by 2040

The government of Kazakhstan has approved a long-term development strategy for the oil refining industry for the period 2025-2040, significantly increasing its forecast for petroleum product exports. The new plan triples previous export projections, aiming for exports to account for 30% of total production by 2040. According to the strategy, key priorities include expanding refining capacity and boosting exports to China, India, and neighboring Central Asian countries. By comparison, in May 2024, the Ministry of Energy had presented a separate draft strategy looking toward 2050, which proposed limiting fuel exports to 10%, and only in cases where domestic supply exceeded demand. Refinery Modernization and Capacity Goals The new strategy builds on recent progress. Following the modernization of Kazakhstan’s three largest refineries, Atyrau, Pavlodar, and Shymkent, total oil processing capacity reached 17 million tons per year. The plan envisions boosting this figure to 39 million tons annually by 2040. “The refining depth has already reached 89%, and the motor fuel produced now meets Euro-4 standards and higher. These improvements have allowed us to meet 90-95% of domestic demand and created favorable conditions for the export of high value-added products,” the Ministry of Energy stated. The strategy calls for expanding existing facilities and constructing a new petrochemical complex to raise refining depth to 94%. This will ensure full domestic fuel coverage amid projected annual demand growth of 1.5-2%, driven by urbanization and industrial development. A major focus will be the advancement of Kazakhstan’s oil and gas chemical industry, including the production of polymers, fertilizers, and other high-value products. Up to $5 billion is expected to be invested in this sector. “The strategy is designed to attract foreign investment, particularly given the country’s reserves of 30 billion barrels of oil. In the context of the global energy transition, this will position Kazakhstan as a regional leader in hydrocarbon processing and enhance economic resilience to global commodity price fluctuations,” the ministry emphasized. Implementation is scheduled to begin in 2025 with pilot projects for refinery digitization. Current Production and Export Landscape In 2024, Kazakhstan’s refineries produced 13 million tons of petroleum products, 1% more than in 2023, according to national oil and gas company KazMunayGas. This included 4.3 million tons each of gasoline and other fuels, and 4.4 million tons of diesel. Kazakhstan also imported 1.2 million tons of fuel from Russia. Prior to the reintroduction of export restrictions in 2024, the country exported 13,500 tons of motor fuel. Similar bans were in place in 2021, 2023, and 2024, meaning Kazakhstan’s fuel exports effectively occurred only in 2020 (nearly 120,000 tons) and 2022 (1,800 tons). As previously reported by The Times of Central Asia, Kazakhstan is planning to invest $15 billion in its oil and gas chemical sector as part of six major projects aimed at strengthening downstream capacity and export potential.

Afghanistan

Kyrgyzstan Significantly Boosts Fuel Exports to Afghanistan

Exports of fuel and lubricants (F&L) from Kyrgyzstan to Afghanistan have surged in early 2025, according to the National Statistical Committee. In the first quarter of the year, Kyrgyzstan exported more than 40 million liters of gasoline and fuel oil to Afghanistan, a more than 100-fold increase compared to the same period in 2024. From January to March 2025, gasoline exports to Afghanistan’s Kunduz province reached $18.5 million in value, up from just 384,000 liters worth $212,000 a year earlier. Afghanistan now accounts for over 90% of Kyrgyzstan’s gasoline exports. Uzbekistan is the second-largest recipient, having imported 2.5 million liters of gasoline worth $1 million in the same period. The average export price stands at approximately $0.50 per liter. It is important to note that none of the exported gasoline is sourced from Russia. Under a bilateral agreement, fuel imported from Russia on preferential terms, grades AI-92 and AI-95, is designated solely for domestic use and is exempt from re-export. These Russian fuels are delivered duty-free via Kazakhstan, keeping retail gasoline prices in Kyrgyzstan around $0.80 per liter. According to the Oil Traders Association, the gasoline exported to Afghanistan and Uzbekistan typically includes the lower-cost AI-80 grade and fuel oil derived from local crude in southwestern Kyrgyzstan. In 2024, Kyrgyzstan imported 630 million liters of gasoline worth $277 million, primarily from Russia, with smaller volumes from Kazakhstan. Beyond fuel, Kyrgyzstan also exports other goods to Afghanistan, including: Approximately 8,000 tons of flour and vegetable oil annually; Around 12,000 tons of construction materials such as cement and metal structures. In return, Kyrgyzstan imports roughly 200,000 units of Afghan goods annually, including dried fruits, nuts, textiles, carpets, and other handicrafts.