Fuel prices to stabilize, says mining ministry

Published Friday April 26, 2013

By B.Khash-Erdene

The Deputy Minister of Mining, O.Erdenebulgan, announced yesterday that fuel prices are likely to stabilize following measures taken by the government to diversify its suppliers of fuel. The announcement came during a regular update on all mining and petroleum related matters. The regular updates are part of the government’s “Transparent Mining Program.”

Mongolia is currently almost entirely dependent on Russia’s Rosneft for its petroleum fuel supply, and the price of fuel in Mongolia fluctuates according to the whim of the company.

According to the Deputy Minister, Mongolia is in discussions with Rosneft to add a clause to their agreement that will ensure that the fuel price charged by Rosneft is based on international market prices.

O.Erdenebulgan also noted at yesterday’s presentation that Mongolia recently began negotiations on contracts to obtain fuel from China, South Korea and Belarus. He said that a fuel supply agreement will be finalized soon between Chinese-owned China Oil and Mongolia’s fuel importers, NIK, Magnai Trade and Shunkhlai. He also said that fuel supply deals may be forthcoming with South Korean companies such as Hyundai, S Oil, and SK.

The price of the fuel supplied by China Oil will depend on the price of the crude oil exported by Mongolia to China, the Deputy Minister said.

Mongolia’s crude oil company is listed under the name of Dachin-33 at the Singapore Stock Exchange. According to Mongolian news website News.mn, the price of 1 ton of oil is currently 700 USD. In January this year, the price was 820 USD.

Ministry of Mining officials said yesterday that there are currently no indications that the price of oil will rise soon, and they expect the price of fuel imported from China to remain stable in the short to medium term. The deputy minister further noted that fuel prices could even decrease by 50 to 60 MNT per liter from next month.

The Deputy Minister also announced that contracts have been made to import European-standard A-92 fuel, which is superior in quality to the A-92 fuel currently imported into Mongolia.

Short URL: http://ubpost.mongolnews.mn/?p=3788

Posted by on Apr 28 2013. Filed under Business & Economics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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