Oil Refining - 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 Refining

After CPC Disruptions, Kazakhstan Wants to Refine More Oil at Home

Kazakhstan wants to more than double its oil refining capacity and sell more petrol and diesel to neighboring countries. The case for reducing its reliance on crude exports has gained urgency. Disruptions to the Caspian Pipeline Consortium (CPC) this year have already forced the country to cut its 2026 oil production forecast by 2 million tonnes. Kazakhstan produced 99.6 million tonnes of oil in 2025 but refined only 18.4 million tonnes. Energy Minister Yerlan Akkenzhenov said at a briefing on August 25 that refining capacity is planned to increase to 40 million tonnes. “We want to bring this ratio, as in other developed countries that are also producers, to one to two or one to three,” Akkenzhenov said. According to him, Kazakhstan eventually expects to supply neighboring countries with motor fuel and expand its export potential. This does not mean abandoning crude oil exports: even after refining capacity reaches 40 million tonnes, a significant share of production will continue to be exported. Astana is instead seeking to shift the balance toward finished products. The oil refining industry development concept runs through 2040. According to the Energy Ministry, Kazakhstan’s refineries processed 18.4 million tonnes of oil in 2025 and produced 15.47 million tonnes of petroleum products. The concept adopted in 2025 envisaged refining rising to 39.2 million tonnes a year by 2040. The government has since accelerated the timetable, targeting 40 million tonnes of annual capacity by 2033. Average refining depth at the country’s three main refineries reached 90% in 2025 and is targeted to rise to 94%. To achieve this, Kazakhstan is preparing to build a fourth major refinery with capacity of up to 10 million tonnes a year. Possible locations include the Mangystau, Atyrau and Turkestan regions, as well as Ulytau, with the authorities expecting to select a site by the end of the year. The new plant could begin operating by 2033, with the Energy Ministry expecting its launch to fully cover domestic demand for jet fuel and allow Kazakhstan to expand exports of K5-standard petroleum products, broadly equivalent to Europe’s Euro 5 standard. Problems with the Caspian Pipeline Consortium, Kazakhstan’s main route for getting oil to the global market, have strengthened the case for diversifying the way Kazakhstan uses and exports its oil. The pipeline runs through Russia to a Black Sea terminal near Novorossiysk, meaning disruptions there can quickly affect production in Kazakhstan. On August 25, Akkenzhenov said the country’s oil production forecast for 2026 had been cut from 98 million to 96 million tonnes. He estimated production losses resulting from attacks on CPC infrastructure at around 3.5 million tonnes. The authorities are trying to compensate for part of the lost volumes by rescheduling major maintenance at large oil fields. Astana is also looking for additional routes to global markets. Akkenzhenov identified Baku-Supsa, the pipeline running from Azerbaijan to Georgia’s Black Sea coast, as one option, saying it could carry around 5 million tonnes a year. The route has seen only limited use since 2022, although...

fuel shortages

Kazakh Refinery Plans Fuel Exports to Russia Amid Petrol Shortages

A small refinery in western Kazakhstan is preparing to process Russian crude and send most of the resulting petrol and diesel back to Russia as Moscow struggles with fuel shortages. The arrangement was confirmed on August 25, the same day that separate incidents occurred at two of Kazakhstan’s three major refineries. On August 19, Russian Deputy Prime Minister Alexander Novak said that, given the situation on the fuel market, the government was “keeping its finger on the pulse” and monitoring supplies daily with companies and regional authorities. According to Novak, Russia had already imposed export restrictions and begun importing petroleum products. Several refineries were also expected to return from repairs, increasing domestic supplies. Russia’s Fuel Shortage The pressure on Russia’s fuel market is illustrated by data published by the industry portal InfoTEK. According to its August 24 snapshot, AI-95 petrol, the widely used 95-octane grade, was available at only 5,620 of Russia’s 26,098 operating filling stations, or 22%. Even in Moscow, it could be found at 161 of 786 operating stations, about 20%. Russia has also temporarily relaxed restrictions on lower environmental grades of fuel, including Euro 4, Euro 3 and Euro 2, known in the Russian classification as K4, K3 and K2. Since 2016, only fuel meeting at least the Euro 5 standard had generally been permitted. Russian economist Boris Grozovsky estimates that, given the refining capacity knocked out by Ukrainian strikes and the number of plants undergoing repairs, Russia is currently short of roughly one-third of the petrol needed at peak demand. August is traditionally a high-demand month because of summer travel and agricultural work. “If it were November now, the situation would be a little easier for the Russian government. Russia is trying to bring in petrol from India, Morocco, Turkey, Kazakhstan and Azerbaijan, but imports also have limitations. The petrol brought in from India turned out to be too expensive,” Grozovsky said. Kazakh Refinery Steps In Speaking at a government briefing on August 25, Kazakhstan’s Energy Minister Yerlan Akkenzhenov said that the small Condensat refinery in Aksai, West Kazakhstan Region, would process Russian crude, with around 70% of the petrol and diesel it produces sent to Russia. Up to 30% will remain on the Kazakh market, while the refinery also retains the right to export products outside the Eurasian Economic Union. “Under the agreement we currently have, up to 30% of the petroleum products in demand, petrol and diesel, will remain in Kazakhstan, while the rest will be shipped to the Russian Federation,” the minister told reporters. Akkenzhenov said the arrangement reflected Condensat’s location close to the Russian border. The refinery is not connected by pipeline to either country’s main oil network, meaning both crude deliveries and fuel exports depend on rail capacity. Akkenzhenov also stressed that the refinery’s owner is not under sanctions and said the Energy Ministry did not see sanctions risks for the project. He said the arrangement would also bring investment and preserve jobs at a refinery that has struggled financially. Condensat’s Financial Troubles Condensat was established in...

Energy

Kazakhstan Mini-Refineries Eye Russia After Rail Export Restriction Lifted

Kazakhstan has lifted a railway export restriction on petroleum products from mini-refineries. For small plants, many of which operate well below capacity, the decision restores an opportunity to sell their products outside the country. Kazakhstan Temir Zholy (KTZ), the national railway company, revoked the restriction following an August 7 decision by the country’s Chief Transport Prosecutor’s Office. The timing is notable: after a series of strikes on its refineries, Russia is facing fuel shortages and has already begun importing gasoline from abroad, including Kazakhstan. Other restrictions on fuel exports from Kazakhstan remain in force, so the KTZ decision does not fully reopen gasoline and diesel exports. Some fuels remain subject to separate bans, and exports to Russia are treated differently from shipments outside the Eurasian Economic Union. What Mini-Refineries Produce The number of mini-refineries actually operating in Kazakhstan depends on how such facilities are defined. Official documents have referred to roughly 30 small petroleum-product producers. More recent industry data provide a clearer picture: more than 30 mini-refineries are registered, with declared crude-processing capacity of about 4.5 million metric tons a year. Of these, 22 are considered operational, with a combined capacity of about 2 million tons. Actual processing is considerably lower, having increased from roughly 400,000 to 800,000 tons annually over the past five years. These are not smaller versions of Kazakhstan’s major refineries in Atyrau, Pavlodar, and Shymkent. Most mini-refineries lack equipment for deep refining, so their output is simpler. Their main products include fuel oil, heating and marine fuels, naphtha, and other distillates. In 2023, mini-refineries processed 895,000 tons of feedstock and produced 346,000 tons of fuel oil, 145,000 tons of diesel fuel, and 171,000 tons of bitumen. Much of this output was not intended for Kazakhstan’s motorists. Mini-refineries produce semi-finished products, including straight-run fuel oil with a relatively high share of light fractions that can be processed further. Their opportunities on the domestic market are also limited by product quality: Kazakhstan has required K4 and K5 motor-fuel standards since 2018, while official assessments say mini-refineries generally lack the equipment to produce fuel above the K3 standard. Restoring export opportunities could therefore have a tangible economic effect for these businesses. The plants have spare capacity but insufficient domestic demand for much of their current product range. Rail exports once again give them a way to look for buyers outside Kazakhstan. And that inevitably raises the question of Russia. Russia Is Looking Abroad for Fuel There is no direct evidence that KTZ lifted the restriction specifically because of the Russian market. Neither the Kazakh authorities nor the railway company has made such a connection. But the decision comes at a convenient time for potential Russian buyers. Ukrainian drone strikes and unplanned refinery outages have reduced Russian gasoline production and contributed to domestic shortages. Moscow has responded by restricting fuel exports and increasing imports from abroad. Russia has already turned to several suppliers. In July, Belarus shipped a record 212,000 tons of gasoline to Russia, while Moscow has also begun...

Energy Security

Kazakhstan Weighs Proposal to Process Russian Crude

Kazakhstan is considering a plan to process Russian crude at its refineries, a step Astana says could support plant utilization and domestic fuel supplies but could also raise sanctions-compliance and diplomatic questions, depending on its scale and structure. The Energy Ministry said on July 30 that discussions cover refining oil “of Russian origin,” selling part of the output in Kazakhstan, and exporting part back to Russia. It did not identify the refineries, volumes, counterparties, or commercial terms. The talks come as parts of Russia face fuel shortages following repeated Ukrainian strikes on refineries. Moscow has extended export restrictions on gasoline, diesel, marine fuel, and gas oils until January 31, 2027, although producers regain exemptions for several products from September 1. The two countries already exchange crude, feedstock, and refined products. Russia discussed buying about 50,000 metric tons of Kazakh gasoline in June. Astana said at the time that it had received no formal request and would protect domestic supply. Trade has since moved beyond discussion. Kazakhstan's Condensate refinery is processing Russian naphtha and exported gasoline to Russia for the first time in July. Kazakhstan has a practical industrial case for considering the proposal. Although the ministry has not identified any refinery involved in the talks, the Pavlodar refinery was designed to process West Siberian crude and remains connected to Russian supply routes. The two countries share extensive energy transport systems and coordinate annual fuel balances. The ministry said steady feedstock would support refinery utilization and domestic supply. The wider regional focus on fuel security was evident on July 31, when Tajik President Emomali Rahmon proposed building large oil refineries in Central Asia, prioritizing domestic demand for essential petroleum products. Decades of infrastructure integration also constrain Kazakhstan’s room for maneuver. More than 80% of its oil exports cross Russian territory through the Caspian Pipeline Consortium. Much of Kazakhstan’s rail trade is tied to Russian networks. These links narrow Kazakhstan’s near-term options and raise the economic cost of abrupt changes to established energy arrangements. The scale and destination of the resulting fuel would determine much of the political meaning. Small volumes sold mainly in Kazakhstan could resemble established regional commerce. A larger export-oriented program supplying Russia during a period of refinery disruption would draw more scrutiny, particularly if it materially eased pressure on Russia’s fuel system. The sensitivity has been heightened by renewed disruption around the Caspian Pipeline Consortium. On July 30, attacks hit NISSOS SIFNOS and MARATHI near the CPC terminal at Novorossiysk. Oil loading stopped only three days after Kazakhstan resumed exports following a week-long disruption. The route is Kazakhstan’s principal oil export artery. The earlier stoppage cut national oil and gas condensate output to about one million barrels per day by July 26, less than half the June average. Russia explicitly blamed Ukraine. Foreign Ministry spokeswoman Maria Zakharova called the July 30 strikes “actions of a terrorist nature” and said they harmed Kazakh and U.S. economic interests. Kazakhstan’s Energy Ministry confirmed the incidents but did not name an attacker....

AI-92 Gasoline

Kyrgyzstan Seeks to Boost AI-92 Gasoline Production as Fuel Supply Pressures Persist

Kyrgyzstan is seeking to increase domestic production of AI-92 gasoline by upgrading surplus low-octane AI-80 fuel. The country continues to face rising fuel prices and supply uncertainty because it relies heavily on imports from Russia. Kyrgyz Petroleum Company (KPC) has issued a tender for chemical additives needed to produce AI-92 gasoline from AI-80 fuel. The company operates an oil refinery in Manas, formerly Jalal-Abad, in southern Kyrgyzstan. The facility can process 500,000 tons of crude oil annually. The refinery mainly produces AI-80 gasoline. Domestic demand for this grade has virtually disappeared, leaving significant stockpiles. Earlier this year, the government authorized exports of domestically produced AI-80 gasoline and diesel fuel to Tajikistan and Afghanistan. The move comes as Kyrgyzstan faces growing pressure from disruptions in the Russian fuel market. Russia supplies more than 90% of Kyrgyzstan’s imported petroleum products. It has imposed temporary restrictions on gasoline exports after Ukrainian drone attacks on oil-processing facilities reduced refinery output. Kyrgyzstan imports approximately 1.2 million tons of petroleum products annually. Domestic refineries currently satisfy only about 5% of national demand, while total annual fuel consumption is estimated at 1.6 million tons. KPC’s refinery is undergoing a $410 million modernization project designed to reduce the country’s dependence on imported fuel. SPEC Engineering, based in the United States, is carrying out the work. External investors are providing $200 million, and Kyrgyzstan’s government is contributing $110 million. Kyrgyzneftegaz, KPC’s parent company, is providing the remaining $100 million. When the project is completed at the end of 2027, the refinery is expected to begin producing AI-92 and AI-95 gasoline that meets K-4 and K-5 Eurasian Economic Union environmental standards. At the launch of the project in September 2024, President Sadyr Japarov said the refinery met only 6.5% of Kyrgyzstan’s demand for high-quality gasoline and diesel fuel. He said its share would rise to 32% after the upgrade. The Manas refinery is one of Kyrgyzstan’s two largest refining facilities. The other is the Junda refinery in Kara-Balta, also known as the Zhongda refinery. It is being upgraded, with completion scheduled for August 2026. As previously reported by The Times of Central Asia, Kyrgyzstan has recently eased its temporary fuel price controls in an effort to stabilize supplies. The government introduced emergency regulation of fuel prices on May 25. Benchmark import prices were set at $860 per ton for AI-92 gasoline and $940 per ton for AI-95 gasoline. The benchmarks for diesel fuel and liquefied petroleum gas were $950 and $575 per ton, respectively. However, a resolution signed on July 7 by Chairman of the Cabinet of Ministers Adylbek Kasymaliev removed AI-95 gasoline from the list of socially significant goods subject to state price regulation. It also abolished the caps on retail fuel prices set earlier. The government said the changes were intended to ensure uninterrupted fuel supplies after AI-95 temporarily disappeared from filling stations in Bishkek.