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Central Asian nations feel the pinch of dwindling fuel supplies as Russia tightens supplies

A shortage of fuel in Russia is hurting millions beyond its borders in Central Asia, where former satellite states still rely almost completely on Moscow’s gas supplies — and its decisions to tighten the taps from one day to the next.

Russia’s government responded this week to domestic fuel shortages by hiking export fees and imposing a temporary export ban on fuel, measures that threaten to cause severe deficits in impoverished Kyrgyzstan and Tajikistan.

In those mainly Muslim countries, which lie on China’s mountainous western frontier, the stakes are high as the all-important sowing season beckons.

The specter of food crises raises alarm over political stability in nations scarred by recent violence — weeks after Russia tightened fuel supplies to Kyrgyzstan last year, causing the cost of living to spike, a popular uprising overthrew the government and left more than 85 people dead.

Long lines of cars formed at gas stations in the Tajik capital Dushanbe this week, as motorists hoped to pre-empt a further bounce in prices.

“The prices are going up before our very eyes,” said Akhmed Abdulloyev, a motorist in his mid-40s. He said prices rose three cents in just a day, with some stations selling gas at 5.3 somoni ($1.2) per liter.

Station attendants in Dushanbe have refused to fill buyers’ canisters, citing urgent demand from other customers and dwindling reserves. Tajikistan imported nine-tenths of its fuel from Russia last year.

The root of the problem lies in Russia, where fuel shortages have left numerous gas stations almost dry, a peculiar predicament for a country so rich in oil reserves.

Russia has one of the fastest-growing automotive markets in Europe, and government incentives for motorists to trade in old models for new cars have boosted the number of automobiles on the road.

With no new oil refineries appearing in Russia since the fall of the Soviet Union, however, gas supply often doesn’t meet demand.

As of May 1, Russia hiked the export duty on gasoline by 44 percent, a move designed to make it more profitable for fuel retailers to sell domestically than abroad.

The Energy Ministry estimates the move will keep an additional 200,000 tons of commercial high-octane gasoline per month within the country.

Russian officials have also signaled a temporary export ban in May. Although Russian officials have contradicted each other on the situation, panic-buying in Central Asia is already creating shortages.

The Russian export tariff hike is as an especially rude awakening for Tajikistan, which had been hoping the tariff might be lifted altogether.

The cost of filling up gas tanks is a particularly sensitive topic in Kyrgyzstan, which hosts a U.S. air base crucial to operations in nearby Afghanistan.

Russia’s imposition of duties on fuel exports to Kyrgyzstan early last year had a sharp knock-on effect on gas retail prices. That exacerbated nationwide discontent which culminated with the storming in April 2010 of government offices and the overthrow of former President Kurmanbek Bakiyev.

Kyrgyzstan’s Oil Traders Association chairman Zhumakadyr Akeneyev said 92 percent of fuel imports are sourced from Russia, with the remainder coming from neighboring Kazakhstan.

A delegation of Kyrgyz fuel traders has negotiated a deal with Russian suppliers not to halt deliveries to Kyrgyzstan, Akeneyev said, although it is yet to be seen whether those promises can and will be kept as Moscow frets over its own consumers’ needs.

“The only restriction will be on certain types of high-octane gasoline, the delivery of which will be limited,” Akeneyev said, referring to the car fuel used by regular motorists.

Gas prices in Kyrgyzstan may rise only by about 4 percent, he said.

Despite that optimistic assessment, drivers in the capital, Bishkek, are still grumbling.

“We have to raise prices for our services, which means we will have fewer customers. With every passing month, life in Kyrgyzstan becomes more expensive, I don’t know how I will earn money for bread if this goes on,” said taxi driver Gasan Khusainov.

Some of Kyrgyzstan’s and Tajikistan’s most important export commodities are agricultural goods, such as fruit, vegetables and cotton.

Farmers need to buy large amounts of fuel to run agricultural machinery in the coming crunch months as the sowing season approaches.

“Increased prices for fuel are a disaster for the Tajik economy,” said political analyst Saymuddin Dustov. “With the price of cotton so high, this year was very important to us, but with fuel like this, that advantage will be useless.”
 
 
The Washington Post
 
 
11.05.2011