Central Asia is battling to prevent a fuel squeeze caused by sustained Ukrainian attacks on Russian refineries from becoming a regional supply shock.
The situation worsened on July 8 as Russia, facing domestic fuel shortages and price spikes in some regions, banned exports of diesel until the end of the month. Russian Deputy Prime Minister Alexander Novak remarked at a televised government meeting, chaired by President Vladimir Putin, that the fuel market status remained complex and that "it is clear that the current situation at filling stations is causing concern among the public".
Kyrgyzstan, almost entirely dependent on Russia for fuel, withdrew state price controls on AI-95 gasoline and said it was pursuing backup supplies from Belarus, China, Uzbekistan, Turkmenistan, Azerbaijan and Kazakhstan.
Kazakhstan, oil-rich but not blessed with an over-abundance of refining capacity, responded that it was considering an official Kyrgyz request for fuel deliveries but would only greenlight any exports after securing its own market.
Tajikistan imported more than 80% of its petroleum products from Russia last year. It announced that aviation fuel suppliers were attempting to source alternative shipments from Kazakhstan and Turkmenistan. The country also opted to tighten controls on fuel prices, official state news agency Khovar reported. Tajikistan’s energy ministry said national fuel reserves would last 60 days, as per Azattyk.
Uzbekistan, a country of 37mn that is Central Asia’s most populous and leans heavily on Russia for fuel, stated that its petroleum reserves were sufficient for two to three months. However, AI-92 gasoline prices on its commodity exchange reached a record high in late June, Havli noted.
Luca Anceschi, a professor of Central Asian Studies at the University of Glasgow, told RFE/RL that the region was experiencing consequences of short-term thinking, saying: “Governments in Central Asia always plan for the short term because of the logic of authoritarian power."
He added: "They're obsessed with preserving power, which means they mainly care about what could remove them from office. They always try to anticipate political threats, so they don't really think long term... It's a policy focused on exports rather than domestic needs. They worry about how to sell resources, not how to make the best use of them.”
Other analysts told regional media that the time has come for those Central Asian countries dependent on fuel imports to diversify suppliers away from over-reliance on Russia, with Iran one obvious option in the medium term should it emerge as sufficiently stable and dependable from the current ongoing Middle East crisis.
Since the demise of the Soviet Union 35 years ago, officials of post-Soviet Central Asia have several times looked at a concept that would establish a regional fuel system. Kazakhstan and Turkmenistan would supply crude, Uzbek refineries would process part of it and refined products would be distributed across the region through coordinated transport networks.
In other developments in the past week related to the fuel deficit, Uzbekistan Airways said it was reducing flight frequencies on some routes due to a shortage of kerosene and rising aviation fuel prices, Kazakhstan stepped up attempts at preventing smugglers from capitalising on Russian consumer demand for black market fuel by tightening border procedures and there were reports of diesel disappearing from official sale in Turkmenistan and becoming available only to those who will pay hiked prices on the quiet.
Tajikistan, meanwhile, as reported by The Times of Central Asia, offered farmers subsidised diesel amid the deepening fuel shortages.