Control of intermediaries on fuel supplies strengthened in Kazakhstan

At the Government session chaired by Prime Minister Alikhan Smailov the issue of providing the domestic market of the country with fuels and lubricants was considered. On the production of petroleum products and the situation on the market of petroleum products reported Minister of Energy Bolat Akchulakov.

First of all, the Minister spoke about the dynamics of production of petroleum products.

According to him, in order to provide the domestic market with the necessary volume of oil products has increased the volume of oil refining and production of fuels and lubricants. Forecast for the production of petroleum products in 2022 is 13.72 million tons, which is more than 1.04 million tons higher than in 2021.

"Already at the end of 8 months of this year, the production of diesel fuel amounted to 3.53 million tons, which is 259 thousand tons or 7.7% more than in the same period of 2021," Akchulakov reported.

Speaking about the availability of diesel fuel at gas stations and oil depots, the minister noted that the measures taken allowed:

  • to increase diesel fuel reserves at oil depots from 151,000 tons or 220,000 tons including ways (Aug. 26) to 163,8 at oil depots or 235,000 tons including ways (Sept. 12);
  • to reduce the share of gas stations with no diesel fuel from 633 to 485 or from 20% to 15% nationwide (3,120 gas stations in total).

"The Ministry, having collected information on the applications of akimats in problem regions with the largest share of private gas stations, together with KazMunayGas is working on the allocation of fuel volumes," Akchulakov reported.

As for the supply of agricultural producers, according to the minister, the situation is as follows.

In July, 106.6 thousand tons were shipped, in Aug., 152.85 thousand tons.

"Shipment to agricultural producers is carried out on a priority basis and is under constant control. It is planned to ship 423,500 tons of diesel fuel to the agricultural producers," Akchulakov reported.

As of today, according to him, the following measures have been taken in this direction:

  • the joint order on the prohibition of export of gasoline, diesel fuel and certain types of petroleum products from the territory of the Republic of Kazakhstan by road transport was adopted.
  • the order on the introduction of differentiated prices at gas stations was adopted, as well as additions to the order are currently being prepared in order to implement control on the release of the limited volume of diesel fuel.
  • the number of tank-car deliveries was increased (the average daily diesel fuel shipments increased from 15.6 thousand tons in the first half of August to 18.9 thousand tons per day by the end of August, i.e. 21.7% growth).
  • Samruk-Kazyna Fund and KazMunayGas company signed a contract on import of 100 thousand tons of diesel fuel in Sept.-Oct. of the current year in the framework of the Government's order. To date, 10 thousand tons have been imported.
  • call-centers were created in the Ministry of Energy and large networks of gas stations for prompt response to the appeals of citizens on the groundless overpricing and refusals to sell fuel and lubricants.
  • akimats of regions and cities of national importance created operational headquarters to monitor balances and make decisions on the distribution of petroleum products in petroleum storage depots to gas stations located in remote settlements.

The Minister also reported on the execution of orders of the Prime Minister.

1. On the instructions to prevent the export of fuel implemented the following. KTZ adopted an internal order to prohibit the export, except refineries, as well as the Ministry of Internal Affairs and the National Security Committee were instructed to take additional measures to prevent the export of petroleum products and the introduction of a ban on the entry of trucks (tractors) without a semi-trailer / trailer;

2. On the provision of small gas stations. There will be a directive distribution of diesel fuel volumes at the expense of KazMunayGas and Petrosan and the priority direction of the agricultural and gas stations. Private suppliers have confirmed their readiness to supply diesel fuel directly to gas stations. In addition, the Ministry of Energy is working on the necessary volumes at the request of akimats for small gas stations;

3. On the optimization of delivery routes in planning the shipments of diesel fuel companies KazMunayGas and Petrosan take into account the geographical location and availability of resources at a particular refinery; priority shipment of diesel fuel is provided for in the nearest regions;

4. To exclude unproductive intermediaries the KazMunayGas and refineries are working on the issue with private suppliers to ship diesel fuel only if direct contracts with gas stations are confirmed, otherwise the shipment may be suspended. Some private suppliers have confirmed the supply of diesel fuel directly to gas stations.

In order to take prompt measures to stabilize the situation on the market of petroleum products under the chairmanship of the First Deputy Prime Minister Sklyar established a commission to ensure the internal market of petroleum products.

According to the Minister, in order to further stabilize the situation the Ministry of Energy proposed the following:

  1. Akimats of regions and cities of national importance to accelerate the transfer of information to the Ministry of Energy on applications for the required volumes of diesel fuel, including: local gas stations (without national networks), utilities and bus fleets (supply from oil depots, not from gas stations).
  2. Ministry of Digital Development, Innovations and Aerospace Industry, Ministry of Energy to accelerate the introduction of a digital system to control the daily supply limits.
  3. KazMunayGas to speed up the supply of 100,000 tons of imported diesel fuel in Kazakhstan and consider importing additional volumes during the refinery shutdown for repairs.
  4. KTZ to continue coordinating and controlling the timely supply of tank cars and priority delivery of shipped volumes.
  5. Agency for the Protection and Development of Competition (in agreement) the introduction of temporary state regulation of wholesale prices of diesel fuel in refineries and tank farms.
  6. Ministry of Energy, local executive bodies, KazMunayGas to ensure control over the production, replenishment of stocks and sales of gasoline (in the experience with diesel fuel).
  7. Local executive bodies together with law enforcement agencies to strengthen control over the circulation and limitation of export of petroleum products outside the Republic of Kazakhstan.

Ministry of Energy within the framework of a special commission under the leadership of the First Deputy Prime Minister Sklyar will continue to coordinate this work.

The Minister also spoke about the situation with the need for bitumen in the country in 2022.

For clarity of the overall picture minister divided the country into 3 zones. The situation is as follows:

  1. Western regions - the lowest demand of 191 thousand tons with production of 500 thousand tons per year;
  2. North-eastern regions - the need of 308 thousand tons is overlapped by own production of 300 thousand tons per year;
  3. Southern regions - the highest demand of 602,000 tonnes with production of 374,000 tonnes.

The total demand of Kazakhstan in bitumen is 1.1 million tons.

According to the Minister, it is necessary to increase the total production of bitumen in the country to 1.2 million tons per year (+ 247 thousand tons by 2021) is possible by recharging the existing plants:

CaspiBitum - up to 500 thousand tons per year (+ 94 thousand tons) due to the processing of Karazhanbas oil;

Qazaq Bitum together with Ontustik Bitum and Eco Bitum - up to 374 thous.tons per year (+200 thous.tons) owing to import of Russian tar oil.

"Road companies need to plan the cost of purchasing additional volumes of bitumen in winter and spring through the Single Purchaser from the Ministry of Industry and Infrastructural Development. It is necessary that the rates for road construction works reflect market prices for bitumen," Akchulakov summarized.

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