Turkmenistan to scrap free gas for households

By bne IntelliNews January 20, 2014

bne -

Turkmenistan is to start charging its citizens for gas as the government continues phasing out subsidies in the domestic energy market.

President Gurbanguly Berdymukhamedov said January 18 that household meters would be installed across the country to encourage people to use energy more efficiently. Berdymukhamedov did not comment on when charging for gas would begin or the pricing structure. However, he indicated that prices would not be high.

"The installation of the meters will allow people to economically consume natural gas, while the maximum payment for using the gas will not create difficulties for the population, for each family," Berdymukhamedov said according to AP.

Turkmen citizens have received free electricity, gas and water since 1993, and drivers get a generous free fuel allowance. In 2006, the parliament voted to continue providing free utilities until 2030. Such programmes have helped offset low salaries, and stave off discontent with the authoritarian regime.

Fuel subsidies in Turkmenistan are among the highest in the world, according to the International Energy Agency (IEA). However, in recent months, there have been signs that the government may want to cut back on subsidies as it increases its focus on gas exports to international markets.

Turkmenistan has the world's fourth largest gas reserves according to a 2008 audit by consultancy Gaffney Cline Associates. The country has become China's largest supplier since the opening of the Central Asia-China gas pipeline in 2009.

In November, Neutral Turkmenistan reported that the government was introducing spot checks to ensure that motorists did not take advantage of the programme providing free gasoline. While each motorist is entitled to 120 litres per month free of charge, many are reported to be abusing the system, with one driver receiving almost 9,000 litres of free fuel in 2013. Ashgabat scrapped its free fuel allowance for tractors, buses and trucks in 2012 due to widespread abuse of the system.

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