Turkmen President Gurbanguly Berdimuhamedow has decided to put an end to the free supply of gas to households. The decree, signed on October 10 during Berdimuhamedow’s speech at a Council of Elders meeting, provides for the regulation of tariffs for natural gas, electricity, water and table salt, among other utilities that the government used to make available to citizens for free since the country’s declaration of independence, back in 1991.
‘’This social services system has fulfilled its role. That’s why a new scale of charges should be imposed encouraging a more rational use of resources, reduction of excessive expenditures and preservation of the country’s national wealth’’, the President was quoted as saying.
The gradual limitation of state subsidies might be viewed as a means to improve national economic indicators, especially since it has been followed by the announcement of a 7-year strategy for the country’s socio-economic development, entailing a separate $46bn energy investment plan. Priority objectives until 2025 include the construction of a gas and chemical complex in the village of Kiyanly, at the Caspian shores, designed to process up to 5BCM of natural gas, as well as the build-up of an ammonia and urea plant in Garabogaz, which will be sourced from the country’s abundant natural gas reserves. Finally, action in the sphere of oil refinery involves construction of a factory for Ai-92 petrol production with a capacity of 600TPA, expected to start working by 2024. Natural gas will be here, too, used as a raw material.
Even though it holds the world’s fourth largest proven natural gas reserves, landlocked and geographically remote Turkmenistan has always had a hard time persuading foreign investors to stay in the country due to a lack of economic, institutional and political reforms, still pending to be adopted. The modernization of existing gas processing facilities and the construction of new ones is believed to allow for the much-needed, macro-oriented economic diversification, in the context of the broader industrialization of the country’s regions.
Available online at: http://www.caspianpolicy.org/energy/caspian-energy-insight-october-19-2017/#6