The FBRK editorial team continues to cover the largest expenditures of Kazakh ministries in 2024.
In previous pieces, we discussed the most expensive public procurements of the Ministry of Agriculture, Ministry of Ecology and Ministry of Finance. Today, we turn our attention to the Ministry of Energy.
An analysis of the Ministry of Energy's largest public procurements in 2024 reveals an interesting picture of the department's priorities. Unlike other ministries, where the bulk of funds go towards digitalisation or environmental programmes, here the lion's share of expenditure consists of fuel purchases.
The largest item of expenditure is the purchase of fuel oil in two large batches totalling more than 3.4 billion tenge. The first batch of 15,000 tonnes cost the budget 2.54 billion tenge, and the second of 5,000 tonnes cost 870.5 million tenge. Notably, the cost of fuel per tonne differs between these purchases, which may be linked to market price fluctuations.
Against the backdrop of these substantial fuel investments, the ministry's other expenses look rather modest. Maintenance of administrative premises with an area of 6,743.2 sq m, located in the building of JSC NC KazMunayGas, has been allocated 118.8 million tenge. This sum is intended for maintaining the cleanliness and technical condition of the premises.
Transport services for the ministry's leadership required 85.7 million tenge. An interesting detail: the technical specifications require saloon cars no older than 2010, with an engine capacity of up to 3,600 cubic centimetres.
The smallest of the major expenditure items – 63.8 million tenge – has been allocated for system and technical maintenance. These funds ensure the operation of information and communication systems, computer equipment, and the maintenance of the department's information security.
As we can see, the expenditure structure of the Ministry of Energy clearly demonstrates its focus on securing fuel reserves, while costs for digital infrastructure and administrative needs constitute a relatively small part of the budget. This distribution of funds reflects the specific nature of the work of the department responsible for the country's energy security.
It is worth recalling that in January, the Ministry of Energy published a draft order on the abolition of state price regulation for petroleum products, such as petrol, diesel fuel and others.
This means that prices for petroleum products will no longer be fixed by the state, but will be determined by the market depending on demand, supply, raw material costs and other factors.
The main reason for the potential reform was the significant price gap for fuel between Kazakhstan and neighbouring countries.
For example, a litre of AI-92 in Kazakhstan costs 205 tenge, while in Russia it costs 288 tenge, in Kyrgyzstan 385 tenge, and in Uzbekistan 489 tenge. A similar picture is seen with diesel fuel: 295 tenge in Kazakhstan versus 355 tenge in Russia, 427 tenge in Kyrgyzstan and 528 tenge in Uzbekistan.
Furthermore, on 28 January at a government meeting, President Kassym-Jomart Tokayev stated the need for new standards for the operation of the energy and utility sectors. According to him, although the crisis has been overcome, the situation still requires changes.
The head of state paid particular attention to the issue of tariff setting, noting that in most CIS countries, tariffs for electricity, gas and petroleum products are significantly higher than in Kazakhstan.
To be continued…