13 April 2022, 12:00
The press center of the Government of the Republic of Kazakhstan hosted a briefing on the results of the socio-economic development of the country. Minister of Agriculture Yerbol Karashukeyev, Minister of Industry and Infrastructure Development Kairbek Uskenbayev, Minister of Energy Bolat Akchulakov answered questions from media representatives.
Minister of Energy of Kazakhstan Bolat Akchulakov spoke about the current situation at the Caspian Pipeline Consortium (CPC).
“We keep in touch with our colleagues. So far, there is a reference from their side to the fact that weather conditions do not allow repair teams to go down under water. You know that we are not physically located there; after all, this is not the jurisdiction of Kazakhstan. So we wait until April 15th. And then, I think that we will send our colleagues or we will go ourselves to determine the prospects on the spot,” said Akchulakov
At the same time, answering a question about the start of repair work, the head of the Ministry of Energy said that the Russian side had identified damage, but Kazakhstan had no information that divers and work teams had begun repairs.
“Three weeks have passed since the moment when CPC completely stopped. Now it works at 60%. If the situation persists, when CPC will operate at 60% capacity during April. On the alternative routes that we are currently using, we found wagons, agreed to increase the quota on the Atyrau-Samara route, that is, we have been solving issues all this time. We don't think there will be big losses. If the CPC stops completely, then there will be big losses. The figures are simple — 53 million tons. If CPC does not load anything, then we have another 16.5 million tons on alternate routes, which we can quickly destroy. It is clear that these are significant losses,” the head of the Ministry of Energy of the Republic of Kazakhstan added.
He also said that it is too early to calculate the damage in material terms. So, for the first quarter of this year, the lead in production was 7.5%. This is a kind of supply that will be exhausted approximately April 15th.
When asked how Kazakhstan can take advantage of the situation when European countries are reducing energy fuel supplies, the Minister of the Ministry of Energy of the Republic of Kazakhstan replied that at the moment there are no sanctions on energy carriers.
“What is happening today, the refusal to buy from certain countries, this is a personal opinion — you can refuse or not. The package of EU sanctions came out today, and there is no oil and gas there. As far as I understand, there is some discussion in the press that this is possible. While it's all rumors, it's not. Today, due to the situation at the CPC, Kazakhstan is limited in the direction of Europe, only 60% of them work there. Because of this, we cannot send all our planned oil there until the repair work is completed. All our export outlets to Europe are connected with transit through Russia and are connected with the ports of the Black and Baltic Seas, where we have a very limited amount, that is, this is not the main route,” the head of the Ministry of Energy replied.
The Minister added that alternative routes are being considered in case of such situations.
“In the direction of Europe, we have only one option left - this is through the Caspian Sea to the Caucasus. We support this route, but it is minor. At the moment, it's probably not possible to take advantage of the situation. But in the future, if we diversify and there are consumers in Europe, no matter what the political situation is, we can, of course. But again, we cannot increase oil production indefinitely. The next expansion of oil production will be in 1-1.5 years, this is the completion of the Tengiz project at the end of 2024, plus 12 million tons. We will be able to sell these 12 million tons additionally,” he added.
The minister said that if the repair is delayed until May, the losses could amount to 1 million tons per month.
In turn, Minister of Industry and Infrastructure Development Kairbek Uskenbayev said that the Program of preferential car loans in Kazakhstan will be launched at the end of April.
“As for car loans, a decision was made at the meeting today. As I said, we will start work at the end of this month. The decision was made officially. Now our colleagues will start working,” said Kairbek Uskenbayev.
The Ministry of Industry has determined the conditions for preferential car loans. The amount of financing under the concessional lending program will be about 100 billion tenge. About 30 billion tenge will be allocated to upgrade the fleet of buses in the regions of Kazakhstan.
Lending for the purchase of cars will be carried out on the following terms: interest rate — 4%; loan amount — no more than 10 million tenge; financing period — no more than 7 years; initial payment — from 0%; the cost of the vehicle is no more than 15 million tenge. Lending will be carried out by second-tier banks.
The Minister of Industry and Infrastructure Development commented on the current situation with prices and the shortage of new cars in Kazakhstan.
“Here you have to look at each model individually. Let's figure it out. If necessary, I will ask manufacturers to lay out their entire financial model, what the cost of this machine consists of,” Uskenbayev said.
Separately, the head of the department was asked about the advisability of launching a preferential car loan program against the backdrop of the current situation with a shortage of new cars in showrooms.
“It turns out that there will be money, but no cars. What will you do to put up some kind of barriers?” the journalists specified.
Kairbek Uskenbayev called the issue of the lack of cars in Kazakhstan “correct”.
“Now they really stand in line for about three to four months. Now I will come and give instructions, if this is true, then we will take adequate measures so that Kazakhstanis receive domestic cars,” Uskenbayev added.
The journalists also asked the minister why car dealers force customers to buy additional equipment for new cars. Uskenbayev, for his part, admitted that he had not heard of such facts.
“I don’t think that car dealers can force someone to do extra, these are probably voluntary options? I don’t know such facts, if there are, please tell me,” he replied.
It should be noted that 71 thousand Kazakhstanis will be able to purchase a new car at an affordable price.
Also, Kairbek Uskenbayev, answering journalists' questions, said that there is no crisis in the construction sector
“We do not have a crisis in the construction sector. There is a desire of some builders in this situation to create some kind of ideology, which is a crisis. In fact, we have a well-defined position. We plan to introduce 15 million square meters of housing this year. Only 15% is being built through the state. The remaining 85% are built in the private sector. Therefore, if we say that we globally influence the construction industry as a whole, then this is wrong,” said Kairbek Uskenbayev.
The minister also spoke about the rise in the cost of construction. According to the Minister of Industry and Infrastructure Development, this mechanism is indicated in the legislation.
“If the cost of construction (project) increases by more than 10 percent, then the developer has the right to contact the administrator. Then the administrator either makes adjustments and increases the cost, or disagrees,” he said.
The Minister of Industry and Infrastructure Development also commented on housing prices.
“You know that under the Nurly Zher program, the cost per square meter built by the state is fixed. It is defined for every city, for every region, and we do not change it. We meet the needs of the construction industry and say: "yes, the state is raising prices, but someone has to buy this housing." Our people will buy this housing, but at a higher price. Therefore, it is necessary to maintain a balance of interests here,” the minister commented.
The head of the Ministry of Industry also noted that the construction industry is important for the country.
“We support the construction industry. But we must take into account the interests of the population. The product that the construction industry produces should be available to the population,” Uskenbayev added.
Also during the briefing, Minister of Agriculture Yerbol Karashukeyev answered journalists' questions. The journalists were mostly interested in the price of bread and the rise in grain prices.
“Flour millers and agricultural producers cannot agree on the price at which grain will be sold and at what price flour mills will buy it. And the main part of this volume — 80% — is exported. Here, the Ministry of Agriculture takes the position of an arbitrator, we do not take sides. Each of them runs their own business,” the minister said.
From April 15 to June 15, 2022, Kazakhstan introduces a quota for the export of flour and grain — 300 thousand tons of flour and million tons of grain.
“This volume is enough not to lose markets,” the head of the Ministry of Agriculture believes.
According to him, at present, grain reserves in Kazakhstan amount to 6.4 million tons, and flour — more than 100 thousand tons.
“The price of flour is stable, it is not growing. In this regard, we will observe exactly until the moment when the disputes do not offend the interests of Kazakhstanis. The situation of hype has nothing to do with the situation with flour millers and producers who cannot find a common price now. The price of flour is stable. Moreover, we are supplying even cheaper wheat in order to supply cheaper social bread to the market. Once again I say that the price of flour is stable. And this conflict does not affect the price inside. Moreover, we have effective tools to keep this price, especially for socially vulnerable segments of the population,” Karashukeyev said.
The head of the Ministry of Agriculture also noted that despite the rise in the price of bakery products, the prices for social bread in the country will not rise.
“We have 275,000 tons of grain in reserve for a cheaper supply of flour to the regions so that social bread remains within the limits that are set. As for the rise in prices for bakery products, we see this process. This is due to the fact that since the beginning of the year we have increased the cost of a ton of wheat. If it was in the region of 115-116 thousand, now it reaches 150 thousand in some cases. If we take the market process, taking into account the rise in the cost of material and commodity resources, in general, the rise in the price of wheat in the world, there will be some volatility. Due to the tenge exchange rate, we expect some increase in prices for flour and derivatives. Social bread will not rise in price. We have social bread at the level of about 100 tenge,” the minister explained.
To keep the price, food corporations supply grain to the regions for 90 thousand tenge from the reserves.
“Social bread in Kazakhstan will not rise in price. We have grain reserves for a cheaper supply of flour to the regions, so that the cost of social bread remains within the limits that have been established,” the minister said.
He also recalled that the country has a stock of flour in the amount of 118 thousand tons. It is enough to meet the country's domestic needs, there are also grain reserves in the amount of 6.4 million tons.