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PM Otorbayev orders to tighten border, customs control over export, import of fuel to avoid smuggling

August 19, 2014

Prime Minister of Kyrgyzstan Joomart Otorbayev held a working government meeting on August 19 in connection with growing prices for fuel and lubricants, the government's press service said.

"We need to analyze the situation with prices and impact of growing prices on social sphere. The harvesting is in progress, fuel issue becomes more relevant and critical. Certain projections should be made for the future," the Prime Minister said.

The Association of Oil Traders explained the growing fuel prices with raise of wholesale prices by Russian refineries, fluctuations of exchange rates of foreign currencies, growing excises, world oil quotations. The main reason behind leap of fuel prices in July 2014 was accident and subsequent stop of production at Achinsky oil refinery in Russia. Though Kyrgyzstan does not buy fuel from the given refinery, but its stop resulted in shortage of around 600,000 tons of fuel (monthly production of the refinery) at the Russian internal market. Some refineries reduced production due to planned repair works. The fuel prices were abruptly raised by other refineries, including those suppling fuel to Kyrgyzstan.

Besides, fuel consumption traditionally grows in spring and summer in the country due to intensive economic activities of population and business.

The prices for RON 80 petrol and diesel fuel will be kept at the current level in August. The prices for rest kinds of fuel may grow from 3% to 7%, the Association of Oil Traders of Kyrgyzstan said.

Stabilization of prices at Russian refineries is expected in autumn. Reduction of fuel is projected since September or October, the time when demand for fuel declines traditionally.

The problem of growing fuel prices affected the neighboring countries as well. Kazakhstan is rationing fuel amid its shortage. Fuel in Tajikistan grew from 14 to 20 cents over the last month. Uzbekistan encounters shortage of oil products as well, one liter of diesel fuel costs $1.5 there.

In such situation fuel may be smuggled to the neighboring countries. Prime Minister Otorbayev ordered to tighten border and customs control over export and import of fuel and instructed to continue efforts restraining further growth of fuel prices, the government's press service said.

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Source: AKIpress News Agency (Kyrgyz Republic)

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