Kazakhstan Imposes Temporary Ban on Some Russian Fuel Imports

An official ban on imports of Russian motor fuels, like light distillates and diesel fuel products, will be in force from March 5-April 20, the Kazakh Ministry of Energy press service announced.

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According to the order, signed by Minister of Energy Vladimir Shkolnik, the ministry’s Oil Industry Development Department should inform Kazakhstan Temir Zholy to undertake measures implementing the order in the prescribed manner. Law enforcement should be controlled by First Deputy Minister of Energy Uzakbai Karabalin.

It was reported earlier that the ban was introduced in order to ensure energy security connected with the danger to impede the activity of the biggest local oil refineries due to the surplus of petroleum products imported from the Russian Federation. The Kazakh Ministry of Energy failed to find a compromise with its Russian counterparts limiting imports of oil products to the country. As a result, it was decided to undertake drastic measures to solve the problem. Sauat Minbayev, head of KazMunayGas, which owns three existing refineries in Kazakhstan, said in February that the volume of imports from Russia was slightly higher than the previously-indicated volumes. According to him, the level of light oil supplies from Russia was at the annual level of 1.8 million tonnes. This level was confirmed as indicative of the oil balance between Kazakhstan and Russia.

“You know that in December we lowered the price of gasoline 92 and diesel fuel twice. All stores are now completely filled with diesel fuel, which composes almost 350,000 tonnes. Thus we are facing a problem. If a cheap gasoline and gasoline that is now cheaper in Russia rushes into the country, it can cause problems to our plants and a lot of people may lose their jobs. Right now we are trying to somehow keep our relations with Russia on a reasonable level. We will meet with the Ministry of Energy of the Russian Federation to decide how to tackle this situation, so that we won’t harm local producers and, on the other hand, can ensure a sufficient inflow of a cheap gasoline,” said Shkolnik while speaking to deputies of Parliament.

This is not the first time Kazakhstan has introduced a ban on imports of Russian petroleum products. Such measures were applied in 2013 and 2014 because of the same reasons. Addressing the problem of Kazakh oil processing plants, Karabalin said that the general amount of gasoline 92 reached 400,000 tonnes, leading to the fact that factories stopped operating.

“This is the worst option for two reasons. First, we have to import a particular amount of fuel from Russia that is defined by the outline plan. If we import the entire amount during the first two quarters of the year, we won’t be able to import fuel during the last two quarters. Secondly, if plants stop operating we can’t get the profit, which immediately affects the national and local budgets and these amounts are estimated in billions of tenge,” explained Karabalin.

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