DUSHANBE, January 23, 2014, Asia-Plus -- First Deputy Head of the Customs Service under the Government of Tajikistan, Nematjon Rahmatov, doubts whether the smuggling of oil products into Tajikistan out of Kyrgyzstan will stop completely.

“The smuggling of oil products into Tajikistan out of Kyrgyzstan has been reduced following cancellation of export tariffs on Russian oil products for Tajikistan but it will scarcely stop completely,” Rahmatov told journalists in Dushanbe on January 23.

“We have different taxation conditions and some dishonest participants of foreign economic activity may take advantage of it,” said Tajik official.  “In Kyrgyzstan, tax and customs tariffs are lower than in Tajikistan that gives rise to fuel smuggling.”

In Tajikistan, an excise tax on one ton of imported gasoline or kerosene amounts to 50.00 Euro while in Kyrgyzstan it does not exceed 17.00 USD.

Excise taxes on one ton of imported diesel fuel are 6.60 Euro in Tajikistan and 4.40 USD in Kyrgyzstan.

“Duty-free Russian oil product deliveries to Tajikistan began last November and some 60,000 tons of duty-free Russian oil products has been delivered to Tajikistan so far,” Rahmatov noted.

We will recall that Russia is expected to deliver one million tons of duty-free oil products to Tajikistan this year.

The Russian government approved the draft law on ratification of an agreement on duty-free Russian oil product deliveries to Tajikistan on December 26, 2013 and endorsed Tajikistan’s indicative fuel balance for 2014 on December 31, 2013.

The Russian government made a decision on temporary application of an agreement on duty-free Russian oil product deliveries to Tajikistan beginning on November 12.

Under Article 11 of this agreement, the document can be temporarily applied starting from official publication of it in accordance with laws of both sides.

Tajikistan was exempted from paying Russian tariffs on oil and gas exports from 1995-2010 and Russia cancelled Tajikistan’s tax exemption on May 1, 2010 that resulted in gasoline prices rising in the country.

On February 6, 2013, Tajikistan and Russia signed the agreement on duty-free Russian oil product deliveries to Tajikistan.  Under this agreement, the sides consider and endorse the indicative fuel balance for the next calendar before October 1 of each year.  Fuels delivered in addition to the indicative fuel balance will be liable to export duty.

Russian oil products delivered to Tajikistan in the volumes not exceeding those agreed on indicative balance are not subject to re-export to the third countries.  This ban also applies to Russian oil products delivered to Tajikistan from other member nations of the Customs Union.

According to statistical data from the Ministry of Energy and Water Resources (MoEWR), Tajikistan imported 383,003 tons of oil products last year, which was 10,795 tons more than in 2012.

A totaled included 137,700 tons of gasoline, 147,832 tons of diesel fuel, 57,771 tons of aviation fuel, 14,700 tons of fuel oil, 17,023 tons of bitumen, and 10,847 tons of engine oil.  

Russia, Kyrgyzstan and Kazakhstan reportedly provided the bulk of Tajikistan’s fuel imports last year.

In 2013, Russia reportedly accounted for 40.1 percent (153,450 tons) of Tajikistan’s fuel imports while Kyrgyzstan and Kazakhstan accounted for more than 39 (151,542 tons) and 10.6 percent (40,321 tons) respectively.

Oil product deliveries from Turkmenistan and Azerbaijan reportedly amounted to 18,159 tons (4.7 percent) and 2,287 tons (0.6 percent respectively).

Last year’s average gasoline prices were 1,169 USD for one ton of Russian gasoline, 899.00 USD for gasoline imported from Kyrgyzstan, 894.00 USD for one ton of Kazakh gasoline, 1,346 USD for one ton of Turkmen gasoline, and 1,464 USD for one ton of Azeri gasoline.