Fuel shortages in Tajikistan have led to higher prices and an economic impact on various sectors, including transportation and food. The shortage is a result of Kazakhstan's decision to ban exports of liquefied petroleum gas (LPG), propane, and butane to Tajikistan.
This has created a challenge for the country, which heavily relied on these imports for fuel. Local market experts suggest that more competition in the fuel distribution sector is needed to prevent such shocks. The impact of an upcoming Chinese-backed oil refinery on the local fuel market is uncertain. Food prices are rising, affecting purchasing power and causing concern among the population.
While Tajikistan officially reported low inflation in 2022, a recent report by private news agency Asia-Plus and interviews with Tajik citizens revealed a decline in their purchasing power. Prices are increasing, not only for imported goods but also for local products, impacting staple items like milk, sugar, potatoes, and rice.
The country's Anti-Monopoly Service considers the fuel shortages and price spikes as "temporary" and has instructed importers to explore alternative routes for oil imports. Tajikistan's status as a net fuel importer leaves it vulnerable to price fluctuations, impacting a population with average incomes of approximately $200 per month.
The fuel distribution market in Tajikistan has been controlled by a small group of companies, including Russia's Gazprom and Faroz, which is linked to the ruling family. Experts suggest that Tajikistan should focus on producing, processing, and refining oil products domestically to gain more control over fuel prices.
The completion of a Chinese-financed oil refinery in Tajikistan's Danghara district, funded over a decade ago, is expected to play a crucial role in the country's fuel supply. However, there is uncertainty about the source of crude oil for the refinery, with Iranian imports potentially being more expensive due to logistical and customs challenges. The country's own hydrocarbon reserves could play a role, but their true extent remains uncertain. Exploration and production in this sector appear to be a long-term endeavor.
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