Central Asia Rues Dependency On Russian Fuel
Weak links in Russia’s petroleum-refinery network and the Kremlin’s power play in Ukraine are shortchanging Central Asian petrol markets, importers complain. With alternatives expensive or unfeasible, and regional refining capacity severely limited, local energy executives are ruing Moscow’s traditional sway over the region’s petrol supply.
Simultaneous repairs at key Siberian refineries that supply Central Asia, along with a major accident in June, have caused a spike in petrol prices in Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, all of which source their fuel from Russia.
In Tajikistan, the price for 95-octane petrol produced at Gazprom’s Omsk refinery rose 38 percent this summer. In Kyrgyzstan, which is 100-percent dependent on Russian fuel imports, the price edged up steadily all summer, and then jumped 5 percent in some parts of the country during the second week of September alone.
The shortages are highlighting the shortcomings of Russian infrastructure: Even though energy-giant Russia produces 10 million barrels of crude a day in a good year, it cannot meet the combined burden of domestic demand and promises to its allies.
Generally, Russia’s fuel-production facilities tend to undergo scheduled repairs in the spring and summer, due to the impracticalities of renovation in the freezing winter. But petrol consumption also tends to rise in the summer, when people are more mobile.
Demand for petrol in Ukraine – in particular in areas dominated by pro-Russian separatists, and Russia-annexed Crimea — has risen sharply. The International Energy Agency reported that, prior to 2012, Ukraine tended to refine the bulk of its crude at domestic refineries.
With Russian refining capacities seemingly stretched to their limits, Kazakhstan, Kyrgyzstan and Tajikistan have all called on China to help improve domestic refining capacity. Chinese companies have already built one refinery with a projected capacity of 800,000 tons per year in Kyrgyzstan, and plan to complete a 1.1-million-ton facility in the Tajik president’s hometown by 2017.
Source: oilpricecom- Central Asia Rues Dependency On Russian Fuel
