Cash-strapped Turkmen government hikes petrol prices by 50%

Cash-strapped Turkmen government hikes petrol prices by 50%
… but will he sell enough to pay for the gas to get that thing home? A purveyor of kvass (traditional Slavic fermented beverage) seen going about his trade in Ashgabat.
By bne IntelliNews February 2, 2018

Turkmenistan hiked petrol prices by 50% on February 1, raising the price of the most popular fuel, octane 95, to 1.5 manat (€0.34 at the official rate, but the black market values the manat at just one third of its official value).

The price rise is seen as another step towards reducing generous welfare subsidies in the country due to declining government revenues. The natural gas-dependent Turkmen economy has for towards three years faced troubles caused by low world hydrocarbon prices. Failed energy deals have also been a problem in recent years. The economic difficulties have hurt the country’s budget, depleting government revenues.

Given the financial woes, the government has also ended the era of discounted gas, water and electricity prices for citizens in Turkmenistan. Reports say the changes forced households to pay 25 times more for tap water starting from November last year - 5 manats ($1.43) per 10 cubic meters of water, up from 0.2 manats ($0.06). The tightly controlled ex-Soviet country still supplies some free cooking gas and electricity to its citizens and sells anything in excess of the free subsidies at subsidised prices. The new price of tap water will also be charged in excess of free monthly allocations. The authorities plan to phase out all subsidies gradually.

Utilities subsidies in Turkmenistan used to be among the highest in the world, according to the International Energy Agency (IEA), and households have received free electricity, gas and water since 1993. While these generous subsidies are believed to have been a factor in reducing popular discontent with the authoritarian regime, since mid-2013 there have been growing signs the government is re-thinking that policy as it increases energy exports to international markets. The advent of low world oil prices only accelerated the government’s plans.

Related Articles

Iran rejects idea that a Caspian Sea settlement is in sight

Iran’s foreign ministry has rejected the suggestion that the five littoral states that share the shore of the Caspian Sea have largely agreed to delineate its maritime borders and settle their ... more

Turkmenistan to take Iran to arbitration over $1.8bn gas supply claims

Turkmenistan announced plans on December 5 to take a dispute with Iran over $1.8bn Tehran supposedly owes for Turkmen natural gas deliveries to international arbitration. Tehran says the figure is ... more

Turkmen budget revenues to decline in 2018, but more questionable spending expected

The Turkmen parliament recently adopted the country’s state budget for 2018 with expected revenues at TMT95.5bn (€22.9bn at the official rate), or TMT8bn less than in 2017 ... more

Dismiss