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Kazakhs May Ban Imports of Low-Grade Russian Fuel, Ministry Says

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March 19 (Bloomberg) -- Kazakhstan may order a ban on shipments of Russian gasoline as the world’s biggest energy exporter sends lower-quality fuel to its southern neighbor, the central Asian country’s Oil and Gas Ministry said.

Kazakhstan, a member of the customs union with Russia and Belarus, will compensate the fuel imports with a comparable supply of crude oil to Russia, allowing it to collect an export duty after it’s resold elsewhere, said Kuandyk Kulmurzin, head of the ministry’s oil industry department, according to an interview posted on the Kazakh prime minister’s website today.

“We need to minimize Russian fuel imports to decrease oil supplies to the country,” he said.

Russia has banned the Euro-2 gasoline grade starting on Jan. 1, resulting in the export of low-quality fuel to central Asian countries, including Kazakhstan, hurting its refineries, Kulmurzin said.

Kazakhstan also plans to send as much as 1.5 million tons of crude oil to PetroChina’s Dushanzi refinery in Xinjiang, China, under a so-called tolling arrangement, Kulmurzin said. In a tolling arrangement, a company provides the feedstock and collects the finished product, paying a fee for processing.

-- Editors: Paul Abelsky, Jeffrey Donovan

To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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