Turkmen Leader Ends Free Gas, Power
Turkmenistan’s supreme representative and legislative authority, the Halk Maslakhaty, has decided to stop the free supply of gas, electricity, water and table salt to households from January 1 2019. President Gurbanguly Berdimuhamedov signed the law, the state news agency reported September 25, which also outlines how future prices will be regulated. New tariffs have yet to be published.
The end of free gas and power supplies to homes had been expected since at least October 2017. Citizens have received electricity, water and natural gas free of charge since 1993. More recently though, quotas were introduced on how much free gas each home could receive, and gasoline prices were increased.
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“The population's income has increased significantly, each family has ample opportunities for earning. At the same time, the country's natural resources should serve not only the current, but also future generations,” the president said. However his claim about a significant rise in income is questionable. The country halted exports to Russia (2016) and Iran (2017) and now sells only to China. Falling gas export value and volume, coupled to high domestic demand, are the main reasons for ending free gas. Meanwhile the currency has been officially devalued by 23% since 2014 to 3.5 manats to the $1, on the open market the rate is 18 manats/$1.
Turkmenistan's gas consumption will rise by 2%/yr on average to reach 36.9bn m3 by 2027, according to a September 23 report from ratings service Fitch Solutions. But it says gas export volume is expected to fall for the fourth year running in 2018 and will continue declining until 2020, before reaching 2017 levels only in 2027. In contrast, the International Energy Agency forecasts that Turkmen gas production will increase 6bn m3/yr during the 2016-2025 period to 86bn m3/yr, before growing more rapidly to 102bn m3/yr in 2030 and 141bn m3/yr by 2040. The government meanwhile hopes to boost revenues by monetising gas inside Turkmenistan: it has inaugurated two big gas-to-chemical plants and is now commissioning a $1.7bn gas-to-liquids (GTL) plant due to open by end-2018.