Kazakhstan’s president has imposed a two-week state of emergency in the financial capital of Almaty after protests regarding a regional energy price hike which spilled over to other parts of the ex-Soviet nation. Footage from Almaty showed lines of riot police and numerous crowd control vehicles gathered in the centre of the city. Tokayev’s order is effective from 5 to 19 January 2022.
The hydrocarbon-rich western region of Mangystau depends on inexpensive LPG as the main fuel for cars. Price increases would have adversely affected the price of food, which has already seen steep hikes since the start of the COVID-19 pandemic.
“Dear compatriots, I urge you to show prudence and not succumb to provocations from within and from without, to the euphoria of rallies and permissiveness,” President Kassym-Jomart Tokayev said. “Calls to attack civilian and military offices are completely illegal. This is a crime that comes with a punishment.”
In Feb 2021, approximately a year prior to the protests, The Caspian News reported that Kazakhstan’s private company Meridian Petroleum had discovered a new oil and gas field in Mangystau. The head of the company called it the largest field discovered in the region since the country gained independence. Mangystau accounts for 25 percent of the oil produced in what is Central Asia’s largest and wealthiest country.
A government move to lower the prices in line with the protesters’ demands failed to calm them. Tokayev said the government would introduce a price cap of 50 tenge (US$0.12) a litre on LPG, roughly half the current market price in Mangystau province.
THe LPg industry
Kazakhstan is a net exporter of energy and energy-related products. A report from the International Energy Agency showed that the Kazakh economy is highly reliant on its fossil fuel resources. The LPG market is regulated with the government setting a price limit on LPG every quarter. But there has been a deficit of LPG in the domestic market due to alleged illegal exports to neighbouring countries where the price is significantly higher.
Low maximum wholesale prices and increased consumption in the domestic market have led to losses and deteriorating financial and economic conditions for the owners and producers of LPG. The Ministry of Energy had planned to phase out state regulation of wholesale prices, but as of 2019, regulation was still in place with the Minister of Energy approving a maximum LPG price.
Liquefied petroleum gas (LPG) is a non-renewable resource made of different hydrocarbon compounds. It is considered a clean fuel as it burns cleanly with very few emissions. In addition to its use as a fuel for cooking and heating, LPG is also used in manufacturing and as a fuel for cars.
LPG, which typically reaches the domestic consumer in cylinders, can be stored nearly indefinitely without degradation. According to estimates, around 2 billion people worldwide use LPG for heating, cooking and other purposes.
In the automobile industry, LPGs have been used as an alternative fuel to power internal combustion engines as it is burns more cleanly than petrol and produces lower amounts of certain harmful emissions. An estimated 6 million European vehicles run on LPG and there are around 17,500 petrol stations in Europe which supply this fuel. It’s a low-carbon fuel when compared to either petrol or diesel and it also costs roughly half the price of both fuels.
Despite these statistics, the availability of vehicles that run on LPG is limited. While existing vehicles can be converted to utilise LPG, it involves installing a separate fuel system. It is also harder to find places to refill LPG as it is not as widely used as petrol or diesel and fewer miles can be traveled on a single tank.
There are now over 27.8 million Autogas vehicles powered by LPG in use around the world. Yet Autogas use is still concentrated in a small number of countries. Turkey, Russia, South Korea, Poland, Ukraine and Italy together accounted for half of global Autogas consumption in 2019.
In Kazakhstan, Autogas sales increased by 43% in 2016 while petrol sales fell by 5%, according to The Astana Times. In that same year, the average price of the most popular type of petrol increased by 13%, leading consumers to convert their cars to Autogas.
There are many major benefits of using LPG as an alternative. The design and safety features of the tanks make them safer to use as they have a shut-off valve. This minimises the risk of a fire without compromising the performance of the vehicle. As 90% of LPG consumption in the US can be met by domestic supply, the use of LPG also helps with the issue of importing fuels for use from other countries.