Expert opinion: energy prices in Kazakhstan are among the lowest in the world

The formation of a single oil and gas market on the territory of the EAEU countries will allow Kazakh oil producers to increase their competitiveness, expert Olzhas Baidildinov stated. The opening of a joint marketing channel within the Customs Union will give a new impetus to the development of the industry, he said. First of all, it will be advantageous for domestic companies that will be able to sell products not only on the territory of Kazakhstan but also overseas. This will certainly lead to an increase in the cost of raw materials, Baidildinov noted. Currently, energy prices in Kazakhstan are among the lowest in the world. This has a negative impact on the investment attractiveness of the country`s oil and gas sectors.

“This is not only a requirement of the EAEU but a requirement of the WTO, which entails that all countries must adhere to prices that are not subsidized by the state. They imply that if the state subsidizes its prices for energy and other sources of raw materials, then it creates unequal conditions for competition. That is, a product that was produced, for example, in Kazakhstan, cannot compete with a product produced in Europe, because energy products are generally much more expensive there,” Baidildinov said.

It bears noting that the EAEU countries are forming a common gas market. The Treaty on its creation should enter into force before the beginning of 2025. Several aspects of the document are still under consideration.