Turkmenistan’s copious reserves of natural gas have long afforded residents an unusual luxury: free gas for cooking and heating their homes. But the subsidy encourages waste, which is encapsulated in an anecdote wherein a Turkmen family never bothers turning the gas stove off because it has to pay for matches.
Unsurprisingly, the waste is expensive, perhaps costing the nation of 5 million up to $5 billion a year. So Turkmenistan’s strongman president says homes should be fit with gas meters and consumers will have to start paying.
Speaking at a government meeting on January 17, President Gurbanguly Berdymukhamedov called on local journalists to run a series of television programs and publications on conserving gas, Turkmen state television reported.
"The installation of the meters will allow people to economically consume natural gas, while the maximum payment for using the gas will not create difficulties for the population, for each family," the Associated Press quoted Berdymukhamedov as saying. From AP:
The move comes in the wake of signs that Berdymukhamedov's authoritarian government sees the subsidized domestic energy market as too heavy an economic burden, and is making profitable energy exports a bigger priority. […]
The government has made it clear in recent months the domestic subsidies are too costly. At a conference in October attended by Berdymukhamedov, one delegate publicly announced that free gas to the country's citizens cost Turkmenistan $5 billion each year.
Neither Berdymukhamedov nor his government offered any clarification about when the changes would take effect or how much consumers would be charged.
Berdymukhamedov's eccentric predecessor Saparmurat Niyazov began supplying electricity, natural gas, water, and salt to the population free of charge in 1993. After Berdymukhamedov came to power, he added petrol to the list.
While water, salt and natural gas supplies were unrestricted, electricity was limited to 35 kWh per person per month and petrol at 120 liters per motorist.
Turkmenistan, believed to sit on the world's fourth-largest natural gas reserves, has been boosting its gas exports in recent years: It now supplies over 21 billion cubic meters of gas (bcm) to China annually, accounting for over half of Beijing's gas imports. The figure is expected to grow to 65 bcm by 2020.
UPDATE, January 21: A Turkmen official has appeared to end speculation over the new gas prices, which, if the reports are correct, may break records for “world’s cheapest natural gas.”
On January 21, Tashkent's Novyy Vek newspaper quoted Dovran Chishiyev, chairman of Turkmenistan’s state gas distribution firm, as saying that every Turkmen citizen would continue to receive 50 cubic meters of gas per month for free. Chishiyev suggested that any additional gas would cost 2 manats ($0.70) per 1,000 cubic meters (tcm), according to Novyy Vek, which was citing Turkmen television. By comparison, Russian gas giant Gazprom buys Turkmen gas at $253 per tcm.