Rising LPG prices prompt crisis in Kazakhstan: Update

Adds detail on price caps, market reaction throughout

Kazakhstan's government has resigned and a state of emergency has been declared in parts of the country following violent protests over rises in LPG prices.

President Kassym-Jomart Tokayev announced the resignation of the government today during a meeting about the "socio-economic situation" in the country. Ministers will continue to carry out their duties until a new government is formed. Tokayev, who succeeded the long-standing former president Nursultan Nazarbayev in 2019, said the government had proved unable to carry out "one of its main tasks — keeping inflation in check."

States of emergency are in place in the western Mangistau region and in the country's largest city, Almaty. Former Kazakh energy minister Nurlan Nogayev, who was appointed governor of Mangistau region by presidential decree in September, urged citizens taking part in "events" to go home.

Market participants said the protests were a reaction to a rise in LPG retail prices, which followed elevated prices at exchange auctions last year.

"Now these lots of gas, purchased at their peak in November, are being sold through gas stations," a trader said.

Yesterday the government said the price of LPG — widely used as motor fuel in Kazakhstan — would be reduced to 50 tenge/l (11¢/l) in Mangistau. Energy minister Magzum Mirzagaliyev had said the previous day that the price of LPG was 80 tenge/l in the region, where it accounts for around 80pc of motor fuel demand. The price regulation, which will also apply to gasoline and diesel, will be in place for six months.

The president also ordered a one-year delay in moving all sale of LPG to commodity exchanges. The transition was to take place at the start of this month.

Unverified video on social media platforms appear to show large crowds outside government buildings and soldiers on the streets. Internet observatory NetBlocks said a "nation-scale internet blackout" is underway.

Public unrest is rare in authoritarian Kazakhstan. The last major outbreak was just over 10 years ago when security forces fired on protesters in the Mangistau region town of Zhanaozen, killing at least 15 people. This had followed clashes between police and former oil workers from Uzenmunaigaz and Karazhanbasmunai — subsidiaries of Kazmunaigaz (KMG) upstream arm KMG E&P — who had occupied the main square having been sacked after going on strike over pay and conditions.

By John Gawthrop, Svetlana Novolodskaya and Ben Winkley