ASTANA (Reuters) -Kazakhstan’s economy minister said on Wednesday that a freeze on fuel prices would remain in place until “at least” next spring, saying that the move had been driven by rising fuel prices in Russia, Kazakhstan’s neighbour and main trade partner.
Speaking to reporters in the capital, Astana, Serik Jumangarin, the minister, said: “What’s important for us now is to wait, at least until next spring. We need to wait for the situation in neighbouring countries to stabilise.”
He added: “The situation is actually related to the current events unfolding due to the conflict between Russia and Ukraine, and petroleum product prices in the neighbouring country are rising sharply.”
Kazakhstan, a minerals giant which produces around 2% of world oil supply, last week introduced sweeping price controls on fuel and utility tariffs, amid accelerating inflation, which was at 12.9% in September.
Earlier this month, the central bank raised interest rates to an unprecedented 18%.
Fuel prices have been a fraught matter in Kazakhstan. A sudden rise in the price of liquefied petroleum gas (LPG) in January 2022 touched off Kazakhstan’s worst unrest since the country of 20 million gained independence from the Soviet Union in 1991.
That year, fuel price protests grew into widespread unrest, which saw hundreds killed and Russian troops deployed as part of a regional peacekeeping force to restore order.
Last week, a Ukrainian drone strike on Russia’s Orenburg gas plant, which processes gas from Kazakhstan’s Karachaganak field, sharply reduced the plant’s capacity for several days.
Astana has walked a diplomatic tightrope on the war in Ukraine, maintaining warm ties with Moscow whilst also stressing its support for Ukraine’s territorial integrity.
(Reporting by Tamara Vaal in Astana, Writing by Felix Light in TbilisiEditing by Andrew Osborn)
