Tajikistan, Kyrgyzstan want Russia to lift export duty on gasoline

Tajik Prime Minister Akil Akilov also asked Putin to review the gasoline export duty, said a source with ties in the Tajik government. He said Tajikistan sent a relevant letter to Russia in June but is still waiting for an answer. Tajikistan, which is discussing its possible entry in the Customs Union with Russia, hopes for a positive answer.

Kyrgyzstan and Tajikistan have received Russian fuel duty free since 1995, in accordance with protocols to the intergovernmental agreements on the establishment of a free trade zone in the CIS. However, Russian customs started collecting a duty on oil products exported to Kyrgyzstan on April 1 and to Tajikistan on May 1.

Kyrgyzstan buys about 3 million metric tons of Russian fuel a year, and Tajikistan imported 551,300 metric tons of oil products from Russia in 2009. However, Russian gasoline export to Kyrgyzstan fell by about 30% and to Tajikistan by nearly 9% in the first six months of 2010. As a result, gasoline prices soared by 30% in Tajikistan, according to the May and June statistics of the country's Economy Ministry.

Dmitry Peskov, the press secretary to the Russian prime minister, said the export duty would be lifted only if the said countries join the Customs Union.

Kyrgyzstan and Tajikistan promised to join the Customs Union ten years ago, but then changed their plans, said Alexei Portansky, a leading researcher at the Moscow Higher School of Economics. Negotiating entry now will not be easy for them, especially for Kyrgyzstan which is a WTO member, he said. Russia is unlikely to cut the duty to zero for them otherwise, Portansky said, adding that Belarus has long been trying to get a similar concession.

Gazprom Neft, the oil arm of the Russian gas export monopoly, is the main player in both countries. In 2006, it bought 74 filling stations in Kyrgyzstan and currently controls about 30% of the retail market in the country and about 70% in its capital, Bishkek. In Tajikistan it has 19 own and 6 leased filling stations and a 33% share in the retail market.

The company writes in its corporate bulletin that the introduction of the duty has affected the Russian oil companies' operation in the CIS. If the settlement of the disputed issue takes too long, their assets in Kyrgyzstan and Tajikistan will turn into a dead weight.