Uzbekistan’s gas shortage sparks calls for reform

TASHKENT, Uzbekistan — A repeat of last year’s gasoline shortage in Uzbekistan is prompting calls for investment in and modernization of the Central Asian nation’s oil industry.

Gas stations in the capital, Tashkent, began running out of fuel on Nov. 15, causing long lines of irate drivers seeking fuel. The crisis resembles last year’s shortage: Normal supplies resumed after the New Year.

“Gasoline always disappears before the state wants to raise prices. Last year was the same situation — no fuel in November in December and then prices went up in January,” said Sanjar, a truck driver in Tashkent.

“And in general, the reason is that those responsible for the purchase of gasoline plundered all the money, and now the state has no money to buy fuel abroad,” said Sanjar, who asked that his surname not be used for fear of government reprisals.

Uzbekistan, which has nearly 600 million barrels of proven oil reserves, consumes more gasoline than it produces. According to the 2012 CIA World Factbook, Uzbekistan produces about 91,000 barrels of refined petroleum products a day and consumes about 137,000 barrels of such products daily.

However, Uzbek officials limit gasoline imports from neighboring Kazakhstan. Those imports are held by the state-owned energy company Uzbekneftegaz and resold to outlets across the country.

Industry insiders say that when the import limit is reached before year’s end — like last year and this year — the government is forced to restrict supplies to gas stations.

A high-ranking Uzbekneftegaz official told The Washington Times that the country could produce enough energy to avoid this problem, but it lacks the necessary investment to improve infrastructure and develop untapped reserves.

“We could eliminate this problem by producing more oil and improving quality of our gasoline,” the official said, speaking on the condition of anonymity. “But authorities do not realize that the oil and gas industry must also be fed, just like a cow that gives milk. They take only milk from our cow. And all the money raised from the gas, is diverted somewhere else, not to the oil industry.”

According to a report earlier this year by the U.S. Energy Information Administration, Uzbekistan attracts less foreign direct investment than its neighbors, and investment in the Uzbek petroleum industry is “insufficient to raise oil and condensate production.”

Some industry analysts say increased investment and modernization aren’t enough to fix the problem: The land-locked former Soviet republic needs a fundamental shift in how its market operates.

“I believe that the true root of the problem is incompetent management of industry,” said Malik Ruza, a columnist for the Uzbek magazine Economic Review. “Uzbekistan has not yet become a country with a market economy, and the fuel crisis is a prime example of how the Soviet-style planned economy can be ineffective.”

“These [import] limits are a relic of the past: The authorities don’t want to give a profitable industry over to private management, where it can work effectively,” Mr. Ruza said.

For Tashkent’s 3 million people, the gasoline shortage is a major inconvenience. But many people who live outside the capital say they have become accustomed to shortages, which occur throughout the year.

Observers say the outlying provinces are allotted smaller monthly allowances of imported gasoline that frequently are not enough to meet demand.

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