Oil and Gas Abundant in Kazakhstan, yet why Government is Doubling Prices?
Image Credit: RFE/RL
Rising prices of LPG (Liquified Petroleum Gas) in Kazakhstan have fueled major protests in the country. The demonstrations are taking place on such a large scale that on Wednesday the government of the country had to resign. Despite this, the protesters are standing on the streets and the struggle with the police continues. Russia has had to send its army because of the national crisis of Kazakhstan.
LPG is used as car fuel in Kazakhstan. LPG is used in 90 percent of the vehicles in the country. In the past, its prices have increased by 100 percent. Earlier, where the price of one litre LPG was 50-60 tenge (around 10 rupees), now its price has increased to 120 tenges (more than 20 rupees). Due to the increase in the price of LPG, inflation has also increased wildly, which the government did not take any major step to stop it.
Rising prices of LPG (Liquified Petroleum Gas) in Kazakhstan
The demonstrations began in the city of Jangaon. Soon it spread throughout the country, including the capital Nur-Sultan and the country's largest city and trading capital, Almaty. The protesters are asking what was the reason behind the increase in the price of LPG.
President of Kazakhstan Kassym-Jomart Tokayev
President Kassym-Jomart Tokayev on Wednesday accepted the resignation of the cabinet headed by Prime Minister Askar Mamin. He has declared a state of emergency in the states of Almaty and Mangystau from January 5 to January 19.
An AFP report said that speaking to caretaker cabinet members, Tokayev ordered them and state governors to control the price of LPG. Controls have also been ordered on the prices of gasoline, diesel and other consumer goods.
Kazakhstan was previously part of the Soviet Union and became a separate country in 1991. Kazakhstan has vast reserves of oil and gas. It is also an important member of OPEC, a group of oil-producing countries. But still, due to rising oil and gas prices in this country, why people were forced to take to the streets?
In fact, in the year 2019, the government had brought a new policy regarding LPG, which is being said to be a major reason for the increase in oil prices. 'Phased Transition To Electronic Trading For The LPG' was the new policy of the government which was implemented in January 2019. This policy was abolished on the first day of 2022, but by then the prices had increased a lot and people's anger broke out on the government.
Under this policy, the subsidy on LPG for domestic use was abolished and the control of prices was in the hands of the market rather than the government. Where the demand for LPG was high, its prices were increased.
Policy aimed at eliminating the black marketing of LPG
The policy of electronic trading brought by the government was also aimed at eliminating the black marketing of LPG. In countries where LPG prices are high, LPG is black-marketed from Kazakhstan to them. But even this policy could not stop the rising oil prices.
However, people are more worried because the rising fuel prices will have an impact on every basic need and other things will also become expensive.
The government's Energy Minister Magzum Mirzagaliyev had initially defended his new policy, but later his tone also changed because of the demonstrations. He has said that fuel prices will come down. In a statement addressed to the protesters, the minister said, "If they return to their homes, no action will be taken against them." And the LPG prices will also come down. The minister also accused gas-stations of price-fixing and said that an investigation team has been constituted for this.
After this statement of the Energy Minister, the gas stations reduced the price of LPG by 90 tenges but the anger of the protesters did not subside and they remained on the streets. The arrest of civil rights activist Max Bokayev by the police has fueled the anger of the protesters.
Demand of People
People are now demanding to reduce the prices of LPG as well as increase their salary because of the rising prices. The monthly minimum income of the people of Kazakhstan is 42,500 tenge (Rs 7 thousand 250).
Speaking to the media, Erlan Sargulov, who was protesting at the main square of Jangaon, said, Either they raise the price of fuel by 50-60 tenge per litre or increase our salary to 200,000 tenges (34 thousand 109 rupees).