The Minister of Energy, Almasadam Satkaliyev, stated that the essence of removing state regulation is that the state will not set a maximum price limit. Prices will be regulated by the market based on supply and demand. According to the speaker, many factors influence prices, including the need for investment in oil and gas infrastructure, as well as the costs incurred by gas station networks.
“Based on experience, if we completely liberalize this market during the transitional period without any regulatory measures, then prices should align with those of neighboring countries. To the north — with Russia, and to the south, they will approach the prices of Central Asian countries,” said Satkaliyev.
Additionally, the minister emphasized that the state will monitor social conditions and ensure that the reform does not destabilize the market.
“Prices will systematically increase under the supervision of the Agency for Protection and Development of Competition. I mentioned the indicator to you. In a reasonable timeframe, prices will at least equal those in Russia,” highlighted Satkaliyev.
According to the Eurasian Economic Commission, in December 2024, the average price for a liter of gasoline in Kazakhstan will be 202.8 tenge, in Russia — 302.9 tenge, in Belarus — 362.1 tenge, in Kyrgyzstan — 382.1 tenge, and in Armenia — 695.6 tenge. At the end of January, the prices for summer diesel fuel and AI-92 gasoline were officially liberalized in Kazakhstan. However, there was no sharp increase — some gas stations only raised prices by 2 tenge. Nevertheless, experts believe that prices will continue to rise in the future. The issue is that starting February 1, major wholesale suppliers of fuel, as noted by the Kazakh Fuel Association (KTA), increased their prices by an average of 4 tenge per liter. This means that gas stations will purchase gasoline at significantly higher prices.
Our domestic market does not meet demand
According to Olzhas Baidildinov, founder of the “Baidildinov. Oil” Telegram channel, our domestic market does not meet demand. After the modernization, we had a surplus for a while, but then we returned to importing the missing volumes from Russia. “Currently, excluding fuel oil, we produce 14.5 million tons of oil products and will import another 1.6 million tons from Russia by 2025,” he said.
The expert pointed out that relying on Russia and basing our economic policy on it is not advisable.
“Currently, imports from Russia come duty-free within the EAEU framework. If we were not part of the EAEU, we would pay significantly more for the fuel. Therefore, this dependency is increasing every year. And until at least 2030, we will remain dependent on RF’s import prices and supplies during shortages. This is because the Shymkent oil refinery, which is controlled by KazMunayGas and CNPC, may only be reconstructed and modernized by 2030. Perhaps even later. At present, all three major oil refineries are under KazMunayGas’s control and operate within their capacity limits,” said O. Baidildinov.
It is worth noting that oil companies supply oil at 20-25 dollars per barrel, subsidizing the domestic market. The average industry price per barrel is 40 dollars. The price is unprofitable, thus discouraging growth in production or investment in oil refining capacities. In such circumstances, one must be aware that each product, item, and service has a dollar cost. “Regarding prices. In the early 2000s, AI-93 gasoline cost 50 tenge, while the exchange rate was 0.35 dollars; now it costs 205 tenge, and the rate is around 40 cents. This means that, in fact, fuel prices in Kazakhstan have remained stable.
“As an expert, I have long stated that we need to be prepared for new gasoline prices. At the current rate, 60 cents — at 530 tenge per liter — is approximately 320 tenge. AI-95 costs 350 tenge, diesel is more expensive because it is a technological product — about 370 tenge. Liquefied gas will be around 170-180 tenge since its production cost is entirely unprofitable. Its production cost is 100 tenge. This does not take into account transportation, storage, and retail sales. Currently, prices in the regions do not cover wholesale prices. We need to prepare for such prices. The era of cheap energy sources in Kazakhstan has ended. The price of heat will increase about threefold, and electricity will cost 40-50 tenge per hour,” the expert stated.
It should be noted that this increase aligns with the initial forecast of the Ministry of Energy of the Republic of Kazakhstan, which estimated that in the first phase, prices would not exceed 5 tenge.