Kazakhstan May Reduce Export Tariffs by One-Third

Energy-rich Kazakhstan could cut crude oil export tariffs by one-third in an effort to ease the burden on domestic producers, Energy Minister Sauat Mynbayev said Monday.

The Kazakh government introduced an export tariff in May in a bid to boost state revenues and tamp down soaring prices on the domestic fuel market.

With the sharp drop in world oil prices, however, domestic producers complained that the duty was eating their profit margins.

Mynbayev told a government meeting the duty is based on an assumed price of $120 per barrel, while Kazakh oil is now selling at $68-$69 per barrel.

He said a proposal to drop the duty to $139 per ton — from the current levy of $210 per ton — is being considered by the government. He didn't say when a decision would be taken.

The duty is adjusted every quarter in line with global oil prices, but Mynbayev has said revisions to the tariff could in future be made on a biweekly or monthly basis.

Kazakhstan has some of the world's largest oil reserves, concentrated largely in the western part of the country, along the Caspian Sea.

International oil consortiums developing some of those major projects, including the Kashagan and Tengiz fields, have been exempted from the tariff.

Author: Jo Amey