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Kazakhstan Ends Era of Cheap Fuel: Price Controls Set for Abolition

On January 17, the Ministry of Energy of the Republic of Kazakhstan published a number of draft orders on the Open NLA (normative legal acts) portal, which were to be discussed within five days. In total, the Ministry proposed the abolition of eleven orders regulating wholesale and retail prices for petroleum products, which have been under price control since 2014. In addition, it intends to change the calculation formulas and price ceilings for wholesale and retail sales of liquefied and natural gas. I have been writing about the need for price liberalization since 2018, as seen in articles such as “#Kazneft, part 2: The Bermuda Gasoline Triangle - Why Prices Will Rise” and “#Kazneft, part 4: We Rank Seventh in the World for the Cheapest Gasoline. Is It Sold at a Loss?” This is a landmark event for the Government of Kazakhstan, which has long maintained not only the lowest fuel prices in the region but some of the lowest globally. The country consistently ranks among the top ten nations with the cheapest energy resources, including fuel, natural gas, coal, and electricity. Cheap and Even Cheaper According to Global Petrol Prices, as of January 20, 2025, fuel prices per liter in dollar terms across the EAEU, CIS, and neighboring countries are as follows: (Table 1) Country RON-95 Diesel Turkmenistan 0,43 0,29 Kazakhstan 0,47 0,55 Russia 0,61 0,71 Azerbaijan 0,65 0,59 Belorussia 0,75 0,75 Kyrgyzstan 0,81 0,81 Afghanistan 0,83 0,83 Uzbekistan 0,99 0,95 Georgia 1,09 1,06 China 1,15 1,02 Ukraine 1,39 1,37 Mongolia 1,49 1,19 Kazakhstan ranks seventh globally for the affordability of RON-95 gasoline, trailing behind Angola, Egypt, Algeria, Kuwait, Turkmenistan, and Malaysia. At the same time, there are “throwaway” prices in Iran, Libya, and Venezuela, but these price indicators do not reflect the actual availability of fuel in these countries. Turkmenistan also shows relatively low fuel prices, primarily due to the use of alternative fuels, such as methane, in transportation. Kazakhstan has historically had nearly double the price gap compared to its neighboring countries, which has facilitated the shadow export of fuel despite an official ban on exporting petroleum products. A Leaky Bucket I have described Kazakhstan's domestic fuel market as a "leaky bucket"— no matter how much fuel is produced, it is constantly in short supply. In 2024, the country processed about 18 million tons of oil, with its three major refineries — Atyrau: 99% owned by the national company KazMunayGas (KMG), Shymkent: 51% owned by China National Petroleum Corporation (CNPC), and 49% by KMG, and Pavlodar: 100% KMG — accounting for approximately 17 million tons. Mini-refineries produced an additional one million tons. The production of petroleum products (excluding fuel oil) amounted to around 14.5 million tons. The balance of petroleum products for 2025 is as follows, million tons: (Table 2) Product Production in the Republic of Kazakhstan Import from Russia Import to production, % RON-92, RON-95, RON-98 5,0 0,29 6 % Diesel fuel 5,1 0,45 9 % Jet fuel 0,75 0,3 40 % Bitumen/tar 1,1 0,50 45 % For 2025,...

Economic Reforms Motor fuel gasoline price Energy Security

Kazakhstan Plans to End State Regulation of Fuel Prices

Kazakhstan's Ministry of Energy is considering the phased liberalization of gasoline and diesel fuel prices as part of a broader reform aimed at addressing price disparities with neighboring countries and curbing illegal fuel exports. The proposed changes have been outlined in a draft document published on the Open NAP portal. The reform would gradually shift fuel pricing from state regulation to a market-based system. Since May 2024, Kazakhstan has implemented a differentiated pricing mechanism, but the Ministry of Energy acknowledges that state regulation has made Kazakhstan the country with the lowest fuel prices in the region. This disparity has incentivized “gray” fuel exports - illegal cross-border sales - and contributed to domestic shortages of petroleum products. Currently, a liter of AI-92 gasoline in Kazakhstan costs 205 KZT ($0.39), significantly cheaper than in neighboring countries: Russia: 288 KZT ($0.54) Kyrgyzstan: 385 KZT ($0.72) Uzbekistan: 489 KZT ($0.92) The price gap is similarly wide for diesel fuel: Kazakhstan: 295 KZT ($0.56) Russia: 355 KZT ($0.67) Kyrgyzstan: 427 KZT ($0.80) Uzbekistan: 528 KZT ($0.90) Price differences for gasoline range from 40% to 138%, while for diesel fuel the gap is between 20% and 79%. The Ministry of Energy emphasizes that this price liberalization is crucial for addressing the challenges caused by these discrepancies. According to the Ministry, the reform will help: Prevent illegal fuel exports. Ensure the economic viability of oil production projects. Enable expansion of refinery capacity from 18 million to 28 million tons per year. The modernization of the oil refining sector, spurred by market-based pricing, would also create new jobs and provide additional funding for government programs. “Phased liberalization of prices with priority support for socially vulnerable segments of the population is necessary. It will create a sustainable system for supplying the domestic market and ensure economic feasibility,” the Ministry’s explanatory note states. The Ministry has assured the public that the transition to market pricing will be gradual and carefully managed to avoid sharp or sudden price increases. Authorities also promise strengthened oversight of the fuel and lubricants market to ensure uninterrupted supply and compliance with legal standards. Agricultural producers, a key sector reliant on affordable fuel, will retain access to subsidized pricing under transparent mechanisms. Additionally, the government has pledged to implement social support measures to protect low-income and vulnerable populations from the financial impact of rising fuel prices. “Liberalization will ensure predictability of changes and create conditions for modernization of the industry. Social support will be prioritized, and agricultural producers will continue to benefit from structured access to fuel,” the Ministry emphasized. Kazakhstan’s plan to phase out state regulation of fuel prices marks a significant shift in the country’s energy policy. By transitioning to market pricing, the government aims to address long-standing challenges, including illegal exports and underinvestment in refinery modernization, while also ensuring social protections for vulnerable groups. The success of this reform will depend on how effectively the government balances economic modernization with public concerns over rising fuel costs.

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Kazakhstan to Crack Down on Motor Fuel Smuggling to Kyrgyzstan

On October 8, Kazakhstan’s Financial Monitoring Agency held a meeting on strengthening control over the smuggling of motor fuel from the country’s border regions. As gasoline prices in Kazakhstan are significantly lower than in neighboring Kyrgyzstan, gasoline is transported from the southern regions of Kazakhstan to northern Kyrgyzstan in passenger car gas tanks. In practical terms, drivers fill up their cars at Kazakh gas stations close to the border, then enter Kyrgyzstan and redistribute the gasoline. According to the Financial Monitoring Agency, up to 10,000 tons of fuel are exported this way monthly through the Kazakh-Kyrgyz border. Fuel is also illegally exported by railway tanks, with documents indicating other contents inside the tanks. At the meeting, the Kazakh government and law-enforcement agencies developed an algorithm of action to prevent the illegal export of motor fuel. Since the beginning of this year, Kazakh law enforcers have filed 21 criminal cases concerning the illegal export of almost 3,500 tons of fuel. Kazakh gasoline is sold in plastic bottles on northern Kyrgyzstan's roadsides and around Bishkek. The most popular gasoline, AI-92, is sold by roadside traders for 58 KGS per liter ($1 = 85 KGS), while authorized gas stations sell it for 67 KGS per liter. In 2023, Kyrgyzstan’s Tax Service confiscated 9,599 liters of illegal fuel, up from 3,422 liters in 2022.

Motor fuel Price gasoline price Economy Gas and diesel Oil and Gas

Turkmenistan Among Ten Countries With Cheapest Gasoline

According to the Global Petrol Prices portal, the average price of gasoline worldwide is $1.21 per liter as of September 30, 2024. “However, there is a substantial difference in these prices among countries. As a general rule, richer countries have higher prices while poorer countries and the countries that produce and export oil have significantly lower prices,” the report explains. Iran, Libya, and Venezuela have the lowest diesel fuel prices. Singapore, Israel, Finland, Albania, Switzerland, Liechtenstein, Iceland, the Central African Republic, Monaco, and Hong Kong have the highest prices. The highest price is noted in Hong Kong, where one liter of gasoline is $3,279. Turkmenistan has the lowest oil prices among Central Asian countries. One liter of gasoline costs $0.429, making it among the top 10 countries in terms of low prices. In Kazakhstan, the price of one liter of gasoline is $0.508. In Kyrgyzstan, it is slightly higher—$0.880. The most expensive price in the region is in Uzbekistan, where the price of one liter of gasoline is $0.983. There is no information about the price of gasoline in Tajikistan.

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Price of Gasoline Set to Rise in Kyrgyzstan

The Ministry of Transport and Communications of Kyrgyzstan has presented a bill, approved by parliament, introducing new mark-ups on fuel and lubricants. Legislative changes to impose additional charges on each liter of gasoline sold at gas stations, are intended to accrue extra funds from motorists for road maintenance. In addition, a recycling fee will be introduced for processing automobile tires, alongside a fee for waste oil disposal, to be accumulated in a new Road Fund under the Finance Ministry. Other regulations introduced by the Cabinet of Ministers include the necessity for all gas stations to use unique markers for gasoline and diesel ; a move which the State Tax Service believes will ensure fuel production transparency and import accounting. The cost of such labeling is yet to be determined, and as stated by Kanat Eshatov, president of the Association of Oil Traders of Kyrgyzstan, “We don't know how much gasoline prices may go up. It will all depend on the size of these fees. Initially, they said that gasoline labeling, in general, would be free. Then, they said that it would be at the expense of oil traders. Today, we do not know the price of the marker, whether it will be stable or change, and whether it will be subject to stock exchange jumps or stability. The price of gasoline and its stability will depend on this." The cost of gasoline has been rising throughout the year, largely as a result of a general increase in prices and repairs at refineries in Russia, from which Kyrgyzstan receives a significant amount of fuel. Meanwhile, the State Antimonopoly Service of Kyrgyzstan reports that the situation in the market of fuels and lubricants in the country remains stable. Supplies of oil products to Kyrgyzstan are carried out without interruptions, and fuel reserves in the country are designed for 1.5-2 months.

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Turkmenistan in World’s Top Ten for Cheap Gasoline

According to The Global Petrol Prices portal, the cheapest gasoline price in the world is $0.029 per liter in Iran. In addition, low prices were observed in Libya ($0.032), Venezuela ($0.035), Egypt ($0.309), Algeria, Kuwait ($0.344), Malaysia ($0.471) and Nigeria ($0.485). According to the portal, the price of one liter of gasoline, Octane-95, in Turkmenistan is $0.0429. It ranks 8th in the list of most affordable gasoline prices. The highest gasoline prices are recorded in countries such as Israel, Barbados, Singapore, Denmark, Switzerland, the Netherlands, Liechtenstein, Iceland, Monaco, and Hong Kong. The highest price is observed in Hong Kong—$3.269 per liter. Kazakhstan has the next lowest price among Central Asian countries. The country is placed 11th in the ranking for the cheapest gasoline prices. In Kazakhstan, one liter of Octane-95 gasoline costs $0.507. The price of gasoline in Kyrgyzstan, which is 30th on the list, was $0.874 per liter at the beginning of September 2024. The price of a liter of gasoline in Uzbekistan during this period was $0.986, ranking 42nd. Fuel markets in these Central Asian countries are regulated, and prices stay mostly the same. The table does not include information about the cost of gasoline in Tajikistan. The Global Petrol Prices portal has been tracking retail energy prices since 2012, including fuel prices, electricity, and natural gas prices in more than 150 countries. Neven Valev, Ph.D., an economist with extensive scientific experience, leads the team of economists.