Why Uzbekistan Keeps Hiking Gas Prices
For fourth time since 2014, Uzbekistan has increased gas prices for domestic consumers.
Uzbek president Shavkat Mirziyoyev signed a decree November 15 increasing the gas price by 12% from April 1, 2018. Before this Uzbekistan raised gas prices three times, the latest being in July 2017 by 7%. 
Two months after the previous gas price hike, however, the Central Bank of Uzbekistan devalued the national currency sharply. Before September 5, the official US dollar exchange rate was 4,210 soums, afterwards it was 7,800 soums. The aim of both the gas price hikes and devaluation seems to be financial problems and a budget deficit caused by low oil and gas export prices and revenues.
Neither the government nor state bodies publish gas production costs. But Uzbek citizens are now paying 263,400 soums ($32.64) per 1000 m3 for their gas, about half the dollar equivalent they paid pre-devaluation. That compares with Russian Gazprom’s production cost per 1000 m3 of about $20, on top of which comes the transport cost of $11/1000km, and Azerbaijan state-run Socar’s spending of $27.53 of which 17% goes on transporting gas inside the country.
Previously, private operators in Uzbekistan could sell gas for domestic use, but President Mirziyoyev (pictured above) has recently stopped this. According to his new decree published November 14 in local media, the authorities will acquire 2mn gas and electricity meters, plus software required for the introduction of an automated metering systems, from three manufacturers: Germany’s Elster, France’s Sagemcom, and local Uzbek firm TosheleŃtroapparat.
Uzbekistan produced 62.8bn m3 of sales gas in 2016, up 8.4% year on year, while consumption was 51.4bn m3, up 2%, according to the latest BP Statistical Review of World Energy.
The central Asian nation has also increased power price from April 1, 2018, and the latest presidential decree also increases the prices of liquid fuels from November 15, by between 35.7% and 43.3% for gasoline and by 70% for diesel. An importer of both crude oil and oil products from Russia, Uzbekistan plans to inaugurate the 100,000 b/d Zafarobod refinery next year, ten times larger than its only current refinery in the same Jizzakh region.
Uzbekistan is not the only country in the region restructuring energy prices. Turkmenistan's President Gurbanguly Berdimuhamedov last month announced an end to free gas for ordinary citizens, adding that prices for gas, water and electricity price would increase gradually and that "the free energy era has finished."
Dalga Khatinoglu, Ilham Shaban