In Kazakhstan, the oligarchs legalized the cartel: what explains the rise in gas prices

The prices for liquefied gas, and hence the cost of transport, rapidly flew up.

This happens everywhere, but the greatest effect was achieved in Aktau, Zhanaozen, and also in the Mangistau region. What is happening is a consequence of a shift in the balance of common sense, flirting with the people and oligarchic games. No matter how market and spontaneous the increase may seem, it is not accidental, and superprofits have their addressees.

According to official and through government information, Kazakhstan as a gas exporter will cease to exist in 2040. Currently, the Republic of Kazakhstan is a net exporter, which sends abroad more than 90% of the produced gas. The transition from an export model to domestic consumption requires an appropriate alignment of the prices at which we export gas with the price at which we consume it.

We should not forget that gas prices are formed by “market” methods, from January 1, 2022 – at open auctions. Here is what the Ministry of Energy says:

The transition to e-commerce will balance the price of LPG based on supply and demand, which will attract investment in the creation of new production capacities. In addition, market mechanisms have a positive effect on the development of competition, reduce the impact of unproductive intermediaries on the market, and create favorable conditions for the development of small and medium-sized businesses.

All this is nonsense, of course. Expert talkers have now been brought in to uphold this opinion, everyone who could be found and taken out of the post-New Year binge.

In fact, we are talking about the fact that there are not so many gas suppliers at all. And electronic trading is just the implementation of cartel arrangements by oligarchs who own gas fields. There are few of them and their names are widely known. It is very easy for them to agree on a price increase, and the electronic system gives this collusion a legitimate look.

And no strikes, chants and noisemakers will help, as they did not help in the case of gasoline and diesel before. The oligarchy can manipulate the remnants in any way they want, including smuggling them into profitable international markets. It is not for nothing that Timur Kulibayev is a member of the board of Gazprom. With the Chinese, too, the issue is adjusted.