Mongolia is facing a fuel shortage at the height of the tourist and agricultural season and has begun looking for additional sources of supply. The country's authorities are holding negotiations with Kazakhstan and Belarus, while simultaneously expanding fuel purchases from other states.
WHAT IS KNOWN
According to Ulysmedia.kz, demand for fuel and lubricants in Mongolia rose 2-3 times during the summer. Against this backdrop, the country's government temporarily abolished customs and excise duties on fuel imports, and the Central Bank issued enterprises more than 360 billion tugriks ($100 million) in preferential loans for the construction of new storage facilities.
The authorities are paying particular attention to aviation fuel. Mongolia purchased 1,000 tonnes of aviation kerosene from China for the first time, and also reached an agreement with South Korea on monthly supplies of no less than 50,000 tonnes of fuel.
ASTANA AND ULAANBAATAR IN NEGOTIATIONS
Mongolia is also in negotiations with Kazakhstan on the supply of petroleum products. A framework agreement is already in place between the two countries, providing for the possibility of supplying up to 1 million tonnes of Kazakh petroleum products per year.
At the same time, Ulaanbaatar views additional purchases not as a rejection of Russian fuel, but as the creation of a safety reserve in case of disruptions to traditional supplies.
WHAT HAS HAPPENED TO THE OIL INDUSTRY
The fuel situation has received additional attention from the Mongolian government. Prime Minister Nyam-Osoryn Uchral has placed the oil industry under his personal monthly oversight.
The authorities describe the construction of the country's first oil refinery as the long-term solution to the problem of import dependence. Its launch has been postponed to 2028 due to delays.
REFINERY SHOULD REDUCE IMPORT DEPENDENCE
Once operating at full capacity, the plant will be able to produce more than 300,000 tonnes of petrol and 800,000 tonnes of diesel per year. It is expected that the facility will be able to cover up to 55% of Mongolia's domestic fuel needs and halve the cost of purchasing fuel from abroad.
CONTEXT
According to Reuters, citing industry sources, Russia is considering the possibility of importing around 50,000 tonnes of AI-92 petrol from Kazakhstan amid a reduction in its own fuel production. This option is being discussed as one of the measures to reduce the fuel shortage on the domestic market.
At the same time, Energy Minister Yerlan Akkenzhenov previously stated that Kazakhstan had not received any official request from the Russian side regarding petrol supplies.
In addition, Kyrgyzstan has also officially approached Kazakhstan with a request to consider the possibility of supplying fuel and lubricants. According to Kazakhstan's Deputy Energy Minister, Kaiyrkhan Tutkyshbaev, the request is under consideration, and a decision will be made taking into account Kazakhstan's national interests.
Risks to Kazakhstan's agriculture have increased amid reduced oil refining in Russia, the tense situation on the fuel market in Central Asia, and the upcoming scheduled maintenance of the Pavlodar Oil Refinery.
According to analysts, risks to Kazakhstan's agriculture have grown amid reduced oil refining in Russia, the tense situation on the fuel market in Central Asia, and the upcoming scheduled maintenance of the Pavlodar Oil Refinery.