Kyrgyzstan Budget Pays 1 Billion Soms in Fuel Subsidies

The Kyrgyz Republic's budget has disbursed around 1 billion soms to fuel traders as subsidies, aimed at keeping retail prices for gasoline, diesel, and auto gas artificially low. The State Agency for Antimonopoly Regulation confirmed that the actual cost of fuel significantly exceeds the prices consumers see at gas stations, with the government bridging the gap.

For AI-92 gasoline, the actual cost is estimated between 111 and 118 soms per liter, while it is sold at 87.9 soms. This means the state subsidizes each liter by 23.1 to 30.1 soms. Diesel fuel faces a larger disparity, with actual costs ranging from 125 to 137 soms per liter against a retail price of 99.9 soms, resulting in state compensation of 25.1 to 37.1 soms per liter. Auto gas sees a smaller difference, with actual costs between 51 and 54 soms and a consumer price of 48.8 soms, leading to subsidies of 2.2 to 5.2 soms per liter.

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The state compensates for the difference between the actual cost of fuel and the price that motorists see at the gas station.

To illustrate the impact, the Antimonopoly Service calculated that a driver using ten liters of AI-92 daily receives approximately 266 soms in subsidies per day, or nearly 8,000 soms monthly. Consequently, the agency is encouraging Kyrgyz citizens to use vehicles more rationally. They recommend opting for public transport, bicycles, scooters, or walking for shorter distances.

Despite these subsidies, fuel prices in Kyrgyzstan remain higher than in some neighboring countries. As of August 17, AI-92 in Bishkek cost 87.9 soms per liter, compared to 47.4 soms in Kazakhstan, 72.1 soms in Russia, and 76.4 soms in Belarus. While Uzbekistan and Tajikistan do not have similar state compensation mechanisms for fuel prices, their prices were 99.9 soms and 127.5 soms respectively. The Antimonopoly Service emphasized that while the subsidy mechanism prevents sharp price increases, it places a significant burden on the state budget.

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The agency urged Kyrgyzstanis to use cars more rationally, choose public transport more often, bicycles, scooters, or walk short distances.