Results of the Year
Radical Reform of the Fuel Market
Armed with the decree of President Kassym-Jomart Tokayev of the Republic of Kazakhstan, "On Measures to Liberalize the Economy," the government aims to implement comprehensive reforms in the production and distribution of petroleum products.
Who Benefited from the Oil Sun?

In what is now referred to as the "Old Kazakhstan" era, this market was among the most closed and monopolized, dominated by a few large players, most of whom were connected, in one way or another, to the "Family." Small independent extraction companies had virtually no opportunity to access refineries on their own. Instead, they were forced to hand over their crude oil to so-called "tollers" on terms dictated by those entities.
“All petroleum products are produced from crude oil prepared for refining, supplied by the same organizations,” noted the Agency for Protection and Development of Competition in its 2022 final report on competition in the fuel market. “Thus, the largest market shares are held by Petrosun LLP, KazMunayGas JSC, and Petrostar LLP:
- 92 RON gasoline: Petrosun – 58.7%, KazMunayGas – 32.6%;
- 95 RON gasoline: Petrosun – 47.3%, KazMunayGas – 24.1%, Petrostar – 16.5%.” (For more details on the Competition Agency's analysis, see “Petroleum Products Market: State of Competition and Monopoly Limitation,” Petroleum No. 4 (142), 2023).
Until August 2022, 49% of Petrosun LLP shares were owned by entities affiliated with Timur Kulibayev, the son-in-law of Kazakhstan's former president, Nursultan Nazarbayev. The remaining 51% of shares were held by the China National Petroleum Corporation (CNPC), which supplied the oil for refining. In the summer of 2022, as part of President Tokayev's policy to demonopolize the economy and return illegally privatized assets, the 49% stake was transferred to KazMunayGas.
This marked the beginning of market reform. It continued with the adoption of the Law on Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on the Implementation of Specific Instructions from the Head of State. The law introduced the following measures:
- Strengthening requirements for oil suppliers, specifically mandating affiliation with oil-producing organizations (OPOs);
- Transition of refineries from a processing to a marketing scheme;
- Granting OPOs the right to refine oil and directly sell their petroleum products;
- Elimination of "nonproductive" intermediaries by increasing requirements for oil depots.
Preliminary assessments suggest the law has positively impacted the market structure by improving OPO access to refining capacity and product distribution. The number of intermediaries in the supply chain—stretching from the wellhead to the pump—has decreased, reducing the retail price of gasoline as fewer margins are added at each step.
The Ministry Listened to Private Companies
In the fall of 2023, the PetroMining Association, which unites the country’s largest independent oil-producing organizations, developed the Roadmap for Addressing Challenges Facing Independent Oil Producers for 2023–2024 and presented it to Minister of Energy Almassadam Satkaliyev. “The roadmap was created based on the outcomes of the first congress of Kazakhstan's independent OPOs, which brought together 70% of active organizations in the sector. These companies expressed concern over a 17% decline in production volumes over the past five years, resulting in a 255.4 bln tenge shortfall in state tax revenues and payments, as well as 181.5 bln tenge in lost profits for companies in 2022 due to the predominance of oil supplies directed toward the domestic market,” the association’s press service reported.
The document includes sections addressing issues such as subsoil use and project documentation approval, geological studies, oil production during the preparatory phase, gas flaring during pilot operations, deregulation of the oil and petroleum products market, taxation and preferences, fines, mini-refinery operations, and other topics.
Following the meeting with the minister, a protocol was signed, and the roadmap was adopted for review by the ministry’s administration. A permanent working group, including OPO experts, was established under the ministry. Additionally, the association was included in an interagency working group tasked with drafting a legislative concept for amendments to laws governing petroleum product circulation.
In May 2024, the head of state signed a decree “On Measures to Liberalize the Economy,” instructing authorities to reduce the share of the quasi-state sector in oil supply to refineries by the end of the year. The decree also mandates ensuring equal and non-discriminatory access for private suppliers to oil processing, transportation, and aviation fuel storage services at airports, including digitizing access procedures.
