Uzbeks Impose High Gas Bills on Tajiks and Kyrgyz

Tajikistan and Kyrgyzstan face tough choices now that the Uzbeks have almost doubled the price of its natural gas exports. NBCentralAsia analysts say the two countries will have to seriously consider whether they can pay the higher price, and may have to reduce their gas imports.



Uzbek gas officials this week announced that its neighbours would have to pay 100 US dollars per 1,000 cubic metres of gas from January 2007, instead of the 55 dollars per 1,000 cu m that they have paid up until now. The Tajiks import about 600 million cu m a year of gas, and the Kyrgyz around 700 million.



The announcement did not come as a surprise for either country: the Uzbeks announced this summer that they would be raising tariffs to bring them more into line with world market prices.



After Turkmenistan, another major regional gas producer, announced in early September that it would charge Russia’s Gazprom 100 dollars per 1,000 cu m, NBCentralAsia predicted that the Uzbeks would soon follow its example.



The price increase could have serious implications for Uzbekistan’s neighbours, most of all Tajikistan.



NBCentralAsia has been told by a source in the Tajik energy ministry that Tajikgaz, the national gas distribution firm, has been selling Uzbek gas that it buys for 55 dollars per 1,000 cu m to domestic consumers for 80 dollars per 1,000 cu m. In Kyrgyzstan, imported gas retails at about 103 dollars per 1,000 cu m.



Tajikgaz has told NBCentralAsia that it will now be charging domestic consumers 130 dollars per 1,000 cu m, while industrial users will pay 150 dollars.



The gas company’s customers owe it around 40 million dollars, a debt that mostly dates back to the 1992-97 civil war period.



In Kyrgyzstan, too, NBCentralAsia predict a substantial rise in the retail price of gas, likely to be in the region of 60 to 80 per cent. That could take the monthly gas bill of the average domestic consumer to 60 or even 75 dollars, unless the government steps in to subsidise the difference.



In both countries, the new price will eat into the competitiveness of major firms that use gas, of which there are around 500 in Tajikistan alone, including Tajikcement and Tajikazot, which make cement and fertilisers, respectively, and the Tursunzade aluminium plant.



NBCentralAsia’s analysts in Tajikistan and Kyrgyzstan agree that both countries will be forced to cut their gas imports from Uzbekistan and shift to using more coal and electricity.



Both have large hydroelectric power stations. However, a dry summer means that the reservoirs that run Tajikistan’s power stations contain less water than usual this year. The country is always short of electricity over the winter months, so this winter things could get very difficult.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)