Kazakhstan and Russia ready to lift ban on the export of fuels and lubricants from Kazakhstan to third countries

On October 3, a protocol lifting the ban on the export of Kazakhstan's light oil products outside the customs territory of the Eurasian Economic Union was signed in Moscow, the press service of the Ministry of Energy of Kazakhstan reports.

During the Russian Energy Week - 2018 International Forum on October 3, the Ministers of Energy of Kazakhstan and Russia Kanat Bozumbayev and Alexander Novak signed an intergovernmental Protocol amending the agreement between the Government of Kazakhstan and the Government of Russia on trade and economic cooperation in the field of oil and petroleum products in Kazakhstan dated December 9, 2010.

“The changes will allow regulating the import of petroleum products from Russia to Kazakhstan and the export of petroleum products from Kazakhstan outside the customs territory of the Eurasian Economic Union at the level of the energy departments of the two countries,” the Kazakh energy department explains.

The Ministry of Energy emphasises that Kazakhstan will be able to more quickly make decisions on opening and closing exports or imports of certain types of petroleum products, depending on the balance of the domestic market of fuel and lubricants.

“At the moment, in Kazakhstan there is a ban on the export of light oil products. The signed protocol creates opportunities for the opening of exports of light petroleum products of the upgraded refineries of Kazakhstan,” the department explained.

The agreement at the level of two governments, concluded in December 2010, implied duty-free deliveries of a certain amount of Russian fuel and lubricants to a certain energy department of the two countries to cover the shortage of fuel. Until 2015, Kazakhstan covered losses in the Russian treasury from duty-free crude oil supplies, and after 2015, the parties agreed to impose a ban on the export of Kazakhstan's light oil products outside the customs territory, first of all, to the Customs Union, and then to the Eurasian Economic Union.

This ban was caused by Russia's concerns about the fact that oil was delivered to Kazakhstan free of duties and excise taxes, that is, at a lower price, Russian-made gasoline could then be re-exported to countries neighbouring Kazakhstan. This agreement was supposed to expire in January 2019, but after the modernisation of three refineries in Kazakhstan, a surplus of gasoline of its own production began to take shape.

In this regard, Astana first imposed a ban on the supply of Russian gasoline to the domestic market by rail, and then forced negotiations on the early lifting of the export ban in order to start selling its own light oil products in the markets of Central Asia.

Reported by Kursiv (Kazakhstan).

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