Turkmenistan slashes gas subsidies as it eyes European exports

By bne IntelliNews February 3, 2014

bne -

Turkmenistan has raised the price charged to households for natural gas as the government seeks to phase out some of its energy subsidies. Already China's top gas supplier, Ashgabat says exports to Europe are now a priority.

According to the government website Turkmenistan.ru households will still receive 50 cubic metres of gas per person per month. However, any consumption over that threshold will now be charged - though at an extremely low 20 manat ($7) per thousand cubic metres.

The new pricing structure, set by presidential decree, came into effect on February 1. However, for the meantime, there is little way of gauging how much gas each household uses. Gas meters are due to be installed in all homes across Turkmenistan to measure gas consumption and encourage more efficient power usage, President Gurbanguly Berdymukhamedov announced on January 18.

Fuel subsidies in Turkmenistan are 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.

Since the opening of the Central Asia-China gas pipeline in 2009, Turkmenistan has become China's largest gas supplier. Late last year it was announced that the country plans to increase exports to the Asian giant to 65bn cubic metres a year by 2020.

Meanwhile, an article by state news agency Turkmen Dovlet Khabarlary says energy exports to Europe through the "Southern Gas Corridor" are now one of the government's priorities. Turkmen officials recently held talks with the head of the EU energy directorate Han Rhine and other EU officials, according to Trend.

Ashgabat is keen to build the planned Caspian sub-sea pipeline, which would allow the export of Turkmen gas across the Caspian to the Azeri capital Baku, and from there further west. The "Southern Gas Corridor" is an EU strategy designed to reduce European reliance on gas routed through Russia, meaning Turkmen ambition for a trans-Caspian route has backing in Brussels.

However, any project crossing the inland sea would need the blessing of the five littoral states. In particular, Ashgabat would likely find Russian and Iranian agreement difficult to secure, while Kazakhstan could also take some persuading.

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss