Kazakhstan plans to reintroduce fuel price caps after widespread protests over prices broke out across the commodities-rich Central Asian country in recent days.
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Civil unrest in recent days has led to the government's resignation and the introduction of states of emergency in some regions, including Mangystau, which accounts for around 25% of Kazakhstan's oil production. So far, there is no indication that protests have impacted oil and gas production, processing or exports in Kazakhstan.
Kazakhstan's state-owned oil and gas company KazMunaiGas did not immediately respond to a request for comment on whether recent protests have impacted its operations.
Kazakhstan is the second largest non-OPEC crude producer in the OPEC+ group, S&P Global Platts estimated its November crude production at 1.61 million b/d.
Foreign oil majors also play a significant role in Kazakh oil and gas production, including Chevron and ExxonMobil's combined 55% stake in the major Tengiz project. Eni, Shell, Total, ExxonMobil, Inpex and CNPC also hold stakes in the major Kashagan field.
On Jan. 5 Kazakh President Kassym-Jomart Tokayev ordered the introduction of temporary price controls for liquefied petroleum gas for a period of 180 days. Price controls will also be introduced on gasoline and diesel for the same period, a statement on the president's website said.
Tokayev said that maximum LPG prices should not exceed prices at the end of 2021. He added that the energy ministry was unable to respond quickly to LPG price hikes during electronic trading as there is no mechanism to limit increases. He ordered the government to postpone full transition to electronic trading of LPG for a year.
"During this period, the regulatory framework should be carefully prepared, the transparent operation of trading platforms should be ensured, and mechanisms to limit the sharp rise in prices should be introduced," he said.
Tokayev also ordered the Prosecutor General to open an investigation into any potential price collusion with a report to be submitted within 20 days.
The president further called for systemic reforms to the gas and gas processing sectors to ensure investment and stable supply.
"We cannot do without systemic, but thoughtful and gradual reforms. It is necessary to carry out a quality reset of the gas industry, to ensure full loading of commercial gas on the domestic market," Tokayev said.
He also criticized slow progress on construction of a new LPG plant in the Mangystau region, after a presidential order was signed in June 2021 to accelerate the project's development.
"At the moment, only a feasibility study has been carried out. The issue of financing the project has not been resolved," he said.