Russia Raises Petroleum Tariffs For Tajikistan, But Drops Them For Kyrgyzstan

Radio Free Europe/Radio Liberty (RFE/RL) reports that Russia has increased tariffs on oil and oil products exported to Tajikistan by as much as 5.3%. This will increase the price of gasoline from the current $232 per ton to more than $250 or even as high as $285 per ton, just in time to squeeze the Tajik farmers as they prepare for the spring planting season. Tajikistan receives 92.5% petroleum products from Russia, mostly supplied by the Russian giant Gazprom. According to RFE/RL, from 1995 to 2010 Tajikistan was exempt from paying Russian tariffs on oil and gas exports. It reports that “former Tajik trade and economic development minister Davlat Usmon suggested to RFE/RL Russia may be seeking Tajik concessions in exchange for a rollback of the duty hike, such as permission to install a Russian base in Tajikistan.”

But George Camm from Eurasianet.org writes that since mid-2010 the introduction of tariffs “pushed prices at the pump (or the rusting tin funnel, as is often the case in Tajikistan) up 30 percent and fomented fears Russia was playing the same game it honed with Bakiyev.” As many have pointed out current conditions in Tajikistan are reminiscent of the pre-April 2010 Kyrgyzstan. I’ve briefly touched upon this in one of my earlier posts. Mr. Camm goes on to say that, “in December, however, officials from both sides announced they had almost worked out a deal to resume duty-free imports. Now, those tariffs are not disappearing, but increasing by an extra 5.3 percent.”

Meanwhile, president of Tajikistan Emomali Rahmon called on Tajik citizens to hoard basic food stuffs for the next two years as the country continues to face economic hardship. Central Asia Newswire reports that he called on households “to stock up on grains and beans to better weather rising food prices, which are being exacerbated by rising fuel prices.”

At the same time Russia has resumed selling duty-free gasoline and diesel fuel to Kyrgyzstan. This will save the country $400 million per year and will take pressure off of the Kyrgyz for the planting season.

Why does Russia play favorites with Kyrgyzstan? Perhaps, because it has the Mount of Vladimir Putin? Jokes aside (or not), the issue is clearly political.

Central Asia Online writes that the decision to suspend tariffs on fuel came after Kyrgyz Prime Minister Almazbek Atambayev’s Moscow meeting with his Russian counterpart Vladimir Putin on March 18. Following the meeting, Atambayev said on Kyrgyz TV that Kyrgyzstan has eliminated Russian rent payments for the Kant military base. Kyrgyzstan also hopes to secure a $200 million loan from Russia, while pressing the U.S. on fuel deliveries to the American base at Manas Airport.

Despite a seemingly uncompromising position on Tajikistan, however, Russia does have critical interests in the country that it wants to negotiate. According to Eurasianet.org it is eyeing the recently refurbished Ayni airbase, while Dushanbe has been slow to announce who will use it. Moscow is also irritated with president Emomali Rakhmon’s unenthusiastic attempts to seal off the 1,300-kilometer border with Afghanistan, through which it claims most of the narcotics make its way to Russia.

Perhaps once again Russia is using oil as a foreign policy tool to bring its neighbors into line.