Tajikistan backs down in fuel talks with Russia

By bne IntelliNews January 24, 2013

bne -

Following months of wrangling, Tajikistan is set to sign a new fuel import deal with Russia next month, after Dushanbe dropped objections to a clause on re-export of gasoline.

Tajikistan's Minister of Energy and Industries Gul Sherali told journalists that the two countries expect to sign an agreement on duty free oil product imports during Russian First Vice-Premier Igor Shuvalov's planned visit to Dushanbe in February, according to Asia Plus.

When the deal is signed, Russia will export 1m tonnes of oil products to Tajikistan. This is around three times the 370,000 tonnes of Tajikistan - which has experienced severe fuel shortages - imported in 2012.

Dushanbe has been keen to go ahead with the agreement, which would replace a previous agreement between the two countries that was cancelled in 2010. However, a provision banning the re-export of oil products from Russia to third countries has been a sticking point in negotiations.

Moscow insists on the clause because of the high level of fuel smuggling in south Central Asia and the risk of fuel delivered to Tajikistan being sold on to third countries such as Afghanistan. Dushanbe had previously objected to the clause, with Tajik officials saying they would be unable to guarantee that gasoline from Russia will not be re-exported.

The disagreement has delayed finalizing the deal, which was agreed in principle at meetings between Russian President Vladimir Putin and his Tajik counterpart Emomali Rakhmon in October 2012. The deal was originally expected to be signed in November.

Fuel shortages are a serious problem in Tajikistan, with high costs pushing up food prices and creating inflationary pressure. Many cars have been converted to run on LPG, which is cheaper and more readily available than petrol or diesel.

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