Suspiciously high fuel consumption leads Kazakhstan to ban its rail exports

Kazakhstan’s energy ministry has put forward a proposal to ban petroleum product exports via rail. Supposedly, fuels are being exported under the guise of so-called “cover goods”, which hide the export of petroleum products and make customs procedures cheaper.

A suspiciously high consumption rate of fuels in Kazakhstan’s southern regions, together with the decline of Kazakh domestic reserves of petroleum, prompted the government to ban petroleum exports via the road earlier. Kazakhstan has the lowest fuel prices of all countries in the region, so it suspects that people are exporting fuels to more expensive neighbouring countries under the guise of “cover goods”.

In line with the road ban, which will remain in effect for at least another half year, the country is now looking to prohibit rail exports of petroleum products as well. The ban includes exports to the countries of the Eurasian Economic Union.

Because of growing prices, Kazakhstan also banned the exports of liquefied petroleum gas, propane and butane. Whether or not this is also related to disguised exports remains unclear, but the ban will expire around the same time as the road ban on petroleum exports.