The experts discussed the issues of the introduction of the best available techniques in the activities of industrial enterprises and the reason they may become disadvantageous for Kazakh business during the meeting of the Committee of Oil and Gas Industry Presidium of the Atameken NCE RK.

Critical issues in the new version of the Environmental Code will be the introduction of the best available technologies (BAT) and economic incentives.

"We have repeatedly raised these issues, because the costs of introduction of the BAT prescribed in the draft code, directly relate to the oil, mining and metallurgical and energy sectors, which will lead to additional costs that are not taken into account by the economic bloc of the government in the wording of the draft code," the Executive Director of the Association KAZENERGY Rustem Kabzhanov said.

When developing the new code, the Ministry did not make calculations on the economic effect after the introduction of the BAT. Besides, the government proposed to exclude the existing measures of stimulation and benefits for subsoil users, which will lead to additional costs and put the business in a difficult position.

The associations received a list of preferences, which are planned to be cancelled. The list includes adjustments to total income, deductions, reduction of taxable income, cancellation of the zero VAT rate, and support for the introduction of Mineral Extraction Tax.

"The most important tax exemption is the abolition of preferential rates for a mineral extraction tax on the supply or transfer of oil to the domestic market. Together with companies that do not work under the production sharing agreement, we have made calculations. On average, the cancellation of oil supply concessions will result in an increase in MET payments by 10%. Also, this amendment will increase the cost of petroleum products by an average of 8 tenge per liter," said Nurlan Dzhanekenov, Managing Director - Director of the Department of Financial and Economic Analysis of KAZENERGY Association.

Deputy Chairman of the Atameken NCE RK Evgeniy Bolgert stressed that the National Palace appealed to the First Deputy Prime Minister of RK Alikhan Smailov on the need to include in the draft Code of stimulating measures for the introduction of BAT, which were missing.

"The issue is serious. Nobody considered how these measures will affect the economy, our proposals and comments have been considered and not taken into account. I believe that it is necessary for the association together with its colleagues from the mining and metallurgical sector and energy companies to prepare their positions and tell Akhmetzhan Yesimov, Chairman of the Board of Directors of Samruk-Қазына Sovereign Welfare Fund, about the problems," Daniyar Abulgazin, Chairman of the Committee, said.

Also during the meeting, Rustem Kabzhanov dwelled on the current problems of liquefied petroleum gas (LPG) sales via electronic trading platforms. At present, the share of the LPG sold on electronic trading platforms has increased to 15%. However, 85% of gas is still sold at a price regulated by the Ministry of Energy.

It should be noted that from March 1, 2020, the share of the LPG sold at the Electronic trading platform is planned to increase up to 25%.

 "The final goal of the reform is to form a common wholesale market in the country, where there will be a market-balanced pricing chain, which will contribute to the expansion not only of domestic consumption of the LPG but also to the growth of investment opportunities for producers. In the meantime, the factories remain in the minus, and the profit goes to the reseller rather than the subsoil user. Today, about 300 companies are engaged in the LPG market. As a rule, these are small companies engaged in the resale of gas and have a small capital," Rustem Kabzhanov said.

The current procedure of trade within the framework of regional platforms shows that within the country price indices reach a difference of 60%. As a solution, KAZENERGY proposes to prepare a plan and mechanism for uniting regional markets to equalize the price disproportion in parallel with increasing the share of e-commerce. Also, temporarily to create an institute of guaranteeing suppliers for independent gas stations and eliminates the legal conflict between the requirements and the possibility of verification in respect of electronic sites.

"It is necessary to include an option on the schedule and procedures for real-time monitoring of double auctions to avoid price collusion. Unfortunately, due to legal collisions, there is now a possibility of collusion. The association spoke about it, we want to exclude these moments," he said.

In turn, Chairman of the Board of NC KazMunayGas JSC Alik Aidarbayev noted that he has been offering for many years to supply prices to the factories.

"Instead, set the maximum price so that the price does not increase steadily. But the plant will set the price, which will allow the careless dealers to leave the market," Alik Aidarbayev suggested.

At the end of the meeting, Daniyar Abulgazin noted that the Ministry of Energy of the Republic of Kazakhstan needs to carefully study possible mechanisms of regulation of the liquefied gas market. As, having released the wholesale price on the LPG, the retail price will rise.