Diesel fuel suppliers fulfill their obligations to 100%, the cost of fuel is formed in market conditions

This information was stated at a briefing in the service of central communications by the Vice-Minister of Energy of the Republic of Kazakhstan Bolat Akchulakov. According to him, this year the agricultural producers of Kazakhstan applied for 394.4 thousand tons of fuel for the harvest campaign. These volumes have already been purchased and distributed to the regions.

At the same time, the ministry can not influence the final cost of diesel fuel, since the price is formed in the conditions of market relations.

"I want to emphasize that Kazakhstan does not have a cheap fuel, the state does not subsidize it. The price is formed in market conditions. The fact that the oil and gas business contributes to the prevention of price increases is their will. It should be noted that from June 1 to November 1, 2018 a new excise on the production of diesel fuel is applied - it makes 9300 tenge per ton (previously the excise tax was 540 tenge, - auth. note)," - Bolat Akchulakov said.​​​​​​​

Representatives of oil and gas companies told how the price is formed. For example, "KazMunaiGas Onimderi" LLP delivers to the market about 140 tons of the total 394 tons. Akimats in regions define operators who distribute the received volumes among consumers by the method of competition.

"We also act as an operator in a number of regions. If the selling price of diesel fuel at the plant is 148-149 tenge per liter, then taking into account the delivery to the tank farms, we sell on prepayment: in Kostanai region - at 165-166 tenge, in Akmola region - at 166-167 tenge, in East Kazakhstan region - 169-170 tenge, in the North Kazakhstan - at 168-169 tenge per liter. It is the maximum price! But, it is necessary to understand that other operators are working on the market apart from us, for whom we are not responsible," - Kuandyk Kulmurzin, Director General of "KazMunaiGaz Onimderi" LLP explained.​​​​​​​

He also added that the inclusion of unscrupulous operators in the appropriate registry at the regional level, with subsequent exclusion from participation in the competition could be one of the tools to suppress the increase in prices at the local level.

There is no direct correlation between the final cost of a diesel fuel and the price of oil, Rustem Kabzhanov, executive director for the development of the oil and gas and energy industry of the KAZENERGY Association, notes.

"An increase in the price per barrel does not mean that additional money goes into the hands of subsoil users. The obligations they assumed at a lower price per barrel were deferred and adjusted. And now, in the period of increasing prices, they are being fulfilled. After all, when the price fell to $30 per barrel - all costs fell on the shoulders of oil and gas companies, but the amount of raw materials delivered to the plants was not reduced, and no one was interested in for what price this oil would be produced and delivered. It was supplied, and less taxes were not paid to the budget. Therefore, the volumes are significant and the enterprises fulfilling their obligations to supply oil for processing - do this rigorously," - Rustem Kabzhanov explained.​​​​​​​

Vice-Minister Bolat Akchulakov added that three oil refineries of the country should produce 4.5 million tons of diesel this year, which will cover 90% of the fuel demand. At the same time, suppliers of raw materials and diesel fuel producers are dominant in the market and are constantly subject to control by the antimonopoly authority for unreasonable price increases.

At the same time, according to the data of "Atameken" NCE RK, compared to neighboring countries, the cost of diesel fuel in Kazakhstan is lower:

Kazakhstan - $0,48 per liter (or 165 tenge),

Russia – $0,69 per liter (more by 43,8%),

Uzbekistan – $0,59 per liter (+22,9%),

Ukraine – $1 per liter (twice more)

Also according to the Department of the agro-industrial complex and the food industry of the NCE, today the share of wheat in the total cultivation area is 54.8%. The yield of wheat over the past five years does not exceed 12 centners per hectare (for comparison: in developed countries with the same rainfall the share is 30-50 centners per hectare). Last year, the average cost of cultivating wheat amounted to 35-40 thousand tenge per 1 ha, 12% of which are costs for fuel and lubricant materials. Farmers sold grain at the market at KZT 42,000 per ton. That is, from 1 hectare they earned an average of 50.4 thousand tenge or 26% of the cost.

Thus, the very low economic efficiency of wheat growing can be noted, and this fact continues from year to year. If farmers retain focusing on wheat cultivation, the only way out for increasing economic efficiency is to increase yields per hectare. Also, productive land can be used more efficiently due to diversification of cultivation areas, according to the department of agro-industrial complex and food industry of "Atameken" NCE RK.