Liquefied gas prices in Kazakhstan are set to rise incrementally, as outlined by Almasadam Satkaliev, the Minister of Energy. The increase is driven by a variety of factors, primarily the growing use of liquefied petroleum gas (LPG) as a motor fuel in the country.
Satkaliev cited several reasons behind the forthcoming price adjustment.
“Of course, there are prerequisites for increasing prices. I have already said that this is an investment that involved the modernization of basic equipment and the understanding that this type of auto fuel is now being sold to the domestic market at a loss below cost,” said Almasadam Satkaliev.
In addition, LPG holds strategic importance as a raw material for large-scale petrochemical projects in Kazakhstan. This unique product is expected to generate employment opportunities within the country, emphasizing the need to meet growing demand.
The Minister explained that measures are being taken to meet this demand, including the redirection of export volumes.
“In this regard, we, of course, are solving the issues of a sharp increase in demand by redirecting volumes from exports; Tengizchevroil provided us with great support, redirecting about 20 thousand tons monthly to the domestic market. We understand that these resources are limited. And on issues of liquefied petroleum gas, we will limit the volume of supplies to the domestic market after this petrochemical plant is launched. And we will probably provide a price forecast, as a result of which, step by step, without allowing sudden jumps, we will bring the cost of liquefied gas at least to the cost level in order to prevent losses for market participants,” said the Minister of Energy of the Republic of Kazakhstan.
Presently, LPG prices in Kazakhstan range from 50 to 80 tenge ($0.11 to $0.17), significantly lower than the estimated production cost of 110 tenge. The gradual price increase will consider factors such as modernization efforts within the industry, with investments from Kazmunaigas and the construction of new equipment by KazGPP expected to impact final pricing.
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