The ministry noted that the need to use this measure is due to a number of reasons.
"Today, the price of liquefied petroleum gas is much lower than the cost of its production. Thus, the cost of producing LPG varies from 60 to 70 thousand tenge per ton. While the maximum wholesale price for manufacturing plants is 40,320 tenge per ton. Thus, for each ton of gas produced, plants incur losses of 20-30 thousand tenge," the report says.
There is also a sharp increase in CIS consumption year after year. Last year alone, consumption in Kazakhstan increased by 400 thousand tons, or 28% compared to 2022. Thus, in 2023, CIS consumption volumes amounted to 2.2 million tons (1.8 million tons in 2022).
"In the event of further restraint in prices for CIS, Kazakhstani manufacturing plants will not be able to increase production volumes to meet demand in the domestic market. Due to unprofitability, plants are increasingly losing interest in CIS production, switching to more profitable products. For similar reasons, investors also do not want to invest in the industry.
"Kazakhstan has some of the lowest CIS prices – from 54 to 86 tenge. For comparison, in Russia the price per liter of gas is 132 tenge, in Azerbaijan – 171 tenge, and in Tajikistan – 273 tenge," the Ministry of Energy said.
According to analysts' forecasts, in 2024, domestic consumption will increase by another 200 thousand tons and will amount to 2.4 million tons. At the same time, the gas deficit may reach 30-40%.
At the same time, manufacturing plants have repeatedly raised questions and requests regarding price adjustments in order to maintain the level of liquefied gas production.
"Therefore, in order to prevent the above risks, from July 1 of this year it is planned to adjust the prices for liquefied petroleum gas. Thus, the maximum wholesale price per ton of liquefied petroleum gas will be 45,158 tenge (previously – 40,320 tenge). At the same time, the maximum retail price will increase slightly – from 5 to 8 tenge per liter, depending on the region.
"The draft order is at the stage of public discussions," the department noted.