Kazakhstans government introduced a six-month ban effective July 1 on export of lubricants and other petrochemicals as a measure to stop short supplies and high prices for such products, according to a government decree.
Signed by Kazakhstan Prime Minister Karim Masimov June 27, the decree bans exports of petrochemicals such as kerosene, gas oil, diesel fuel and motor oils. It is aimed to prevent critical shortages of these products and their price hikes, said the state regulation published on the Kazakh governments web-site. The list of banned export products also includes hydraulic, white and industrial oils, as well as electric isolation oils, light distillates and other petrochemicals. The ban only excludes heating fuel exports.
Kazakhstan industry depends heavily on petrochemical imports from Russia, and the trade between both states is regulated to protect the market and avoid domestic shortages by re-export to third countries such as China. Citing re-export problems, Russia banned base oil and other petrochemical exports to Kazakhstan in January. Kazakhstan in response banned the export of naphtha, gasoline, gasoil, diesel, base oils and lubes outside of the customs union (Russia, Belarus and Kazakhstan) earlier this year, according to the May 28 Kazakh government decree on export duties increases.
Kazakhstan has continued temporary, six-month bans on petrochemical exports since 2010 as it struggles with fuel supply shortages.
In 2011, the countrys energy minister explained that this measure is not related solely to shortages of petrochemicals or their high prices. In essence, this measure is to stop the re-export of petrochemicals [in third countries] and curb the speculation in prices made by some Kazakh importers arising from the different import-export duties. At that time, the minister urged the Kazakh oil industry to be self-efficient, and said the petrochemical product export bans should continue until modernization of the countrys three refineries is finished at the end of 2015.
In 2013 Russia held 63 percent of the total trade between the countries of the custom union, according to the unions official website. For example, Russian exports to Kazakhstan total around 85,000 tons of base oils annually. Almost half of these supplies come from Gazprom Nefts Omsk refinery.
That Russian oil major is also the biggest finished lubricant supplier in Kazakhstan, and in 2013 it held 40 percent of the countrys lubricant sales. The countrys only big blender is Hill (High Industrial Lubricants and Liquids), with a 70,000 t/y plant commissioned in 2010 in Shymkent, located in southern Kazakhstan. Hill focuses on supplying the domestic market, the company told Lube Report, although some of its production is exported to China. Now put on hold, these shipments previously enjoyed the absence of an export tax.
The country has one smaller blender called Semol, located in Semey, eastern Kazakhstan, which manufactures lubricants, technical fluids, metal drums and plastic canisters.