Uzbekistan seeks to standardise gasoline prices nationwide

26 October 2016, Week 42, Issue 904

Uzbekistan has raised the price of gasoline products for domestic consumers by around 30% in a move ostensibly intended to discourage illicit overcharging for fuel in provincial areas.

Uzbekneftegaz National Holding hiked the price of Al-80 gasoline by 34.9% to 2,800 som (US$0.91) per litre from October 23, Trend reported, while Al-91, 92, and 93 gasoline prices were raised by 31.6% to 3,000 som (US$0.97). Al-95 gasoline prices rose by 31.7% to 3,300 som (US$1.07) per litre.

Uzbekneftegaz wants the new rates to apply nationwide to stamp out variations in the price customers pay depending on their location. Trend reported that Al-80 gasoline had fetched 2,075 som (US$0.67) in the Uzbek capital of Tashkent, but sold for 3,000 som (US$0.97) in more remote regions. Moreover, some Tashkent customers were said to have bought up cheaper supplies for resale on the provincial black market at rates between 3,000-5,000 som (US$0.97-1.62) per litre.

Despite operating a clutch of refineries with roughly 225,000 bpd of capacity, according to the Eurasian Research Institute, Uzbekistan has suffered shortages of refined produce owing to dwindling upstream production. Uzbek refining throughput averaged 70,000 bpd last year, according to the BP Statistical Review of World Energy, down from 105,000 bps in 2005 and 73,000 bpd in 2010.

Eurasian Research said in May that recovery rates at Uzbek fields had averaged at 28%, though Uzbekneftegaz wants to lift this to 56% by introducing enhanced oil recovery (EOR) at ageing fields.

But while Tashkent has offered international oil companies (IOCs) tax-free exploration and even a seven-year waiver on production levies in a bid to spark investment, output fell to 64,000 bpd in 2015, from 115,000 bpd in 2005 and 66,000 bpd last year.

Even with fading crude extraction, Tashkent fiercely guards Uzbekistan’s supposed energy self-sufficiency, by limiting imports from Russia and Kazakhstan through the Omsk-Bukhara and Shymkent-Tashkent pipelines. Uzbek oil consumption halved from 103,000 bpd to 59,000 bpd between 2005 and 2015 as the government continued to restrain demand by encouraging the use of alternative fuels like coal.

Joseph Murphy

Edited by

Joseph Murphy

Editor

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