Proposed breakup to Kazakhstan’s gas monopoly could cut costs and boost service quality

The Agency for Protection and Development of Competition reported that Kazakhstan is almost fully gasified, but due to the monopoly, its installation has become too expensive for ordinary Kazakh citizens, according to a Kazinform News Agency correspondent.

According to the agency, the Atyrau, Aktobe, Zhambyl, Mangistau, and West Kazakhstan regions, as well as the cities of Almaty and Shymkent, are already 90% equipped with gas. The Kyzylorda, Kostanay, and Turkistan regions are between 50-75% equipped, while Astana, East Kazakhstan, Karaganda, Akmola, and Ulytau regions are in the active gasification stage, with up to 40% of the population having access to gas.

Meanwhile, “KTG Aimak” is the monopolist in the retail market for commercial gas in 10 regions of the country. There is no competition, and the final cost of gas connection services has significantly increased.

The agency proposes to attract private investors and independent organizations to the industry. Moreover, the unified gas supply system in the regions will be fragmented - various enterprises will handle network connections, pressure testing, sealing, repairs, and other services. This will also affect “KTG Aimak” itself, ensuring equal access to transportation capacities and gas for other market participants.

“The measures are aimed at making the gas market more decentralized and competitive without harming end consumers, who will have the opportunity to choose and improve the quality of gas supply services, taking into account numerous complaints from residents about “KTG Aimak” regarding service calculations, access, subscriber connections, fines, and more,” the agency explained.

Thanks to these measures, Kazakh citizens will be able to save about 2 billion tenge per year on commercial gas purchases, excluding VAT. The antimonopoly body has proposed enacting legislation to regulate the prices set by all market participants.