New energy tariffs introduced in Uzbekistan to help reforms

The government of Uzbekistan has announced a series of energy price increases for both residential and business consumers designed to bring the nation’s fuel and energy sector back to profitability and to encourage greater foreign investment. The new tariffs, which cover electricity, natural gas, LPG and automotive fuels, are scheduled to take effect from 15 August 2019.

The new tariff levels see increases of 18% for residential power, 18% for residential natural gas supply, 13% for gasoline and 13% for diesel fuel. Somewhat higher increases are scheduled for business users, including 36% for electricity.

‘We need to allow enterprises in the energy sector room to invest independently, without state assistance, so that they can increase production of strategically important supplies,’ commented Deputy Energy Minister Jurabek Mirzamakhmudov. ‘At low prices, it is impossible to attract private investors in this sector. Private investment is essential if we want to expand and modernise energy production facilities.’

The Uzbek government has stressed that the new pricing is not intended to link domestic to international market prices, but rather to reflect domestic costs, allowing energy enterprises enough margin to cover needed investments. It has also pointed out that a separate Cabinet resolution, approved on 12 July, provided for a 10% increase in Uzbekistan’s minimum wage, in part to mitigate the impact of the increased utility prices.

Even after the increases, in most instances, gas, electricity and fuel prices in Uzbekistan will still be well below rates recorded among neighbouring states.