Surging Propane Prices in Uzbekistan Amid 57% Demand Increase
Uzbekistan’s Energy Minister, Jurabek Mirzamakhmudov, recently discussed the significant increase in propane prices in the country from April to September on the Lolazor podcast. Mirzamakhmudov attributed the doubling of propane prices to limited production increases and a notable rise in the number of propane-powered vehicles.
Mirzamakhmudov stated that Uzbekistan’s production of propane-butane had only slightly increased in 2024, reaching around 850,000–860,000 tons, compared to just over 800,000 tons in previous years. He also highlighted the surge in propane demand, with a 57% increase in the number of vehicles running on propane in the past year.
The minister explained that one of the main factors contributing to the price hike was the increase in propane-powered vehicles, along with the discrepancy between the subsidized price of propane at 1,600 UZS and market prices. This led to corrupt practices, such as illegal sales of propane intended for households, further exacerbating market shortages and price inflation.
Mirzamakhmudov also addressed challenges related to propane imports, noting that the government had previously allowed private companies to handle imports independently but had to intervene due to supply shortages. He acknowledged concerns about supply fluctuations and the dominance of a single supplier in the market contributing to price volatility.
Economist Otabek Bakirov raised concerns about potential price spikes as early as July, which were not adequately addressed by the government despite warnings from the Competition Committee. Mirzamakhmudov assured that the government is working closely with the committee to address these issues.
Although Mirzamakhmudov expects propane prices to stabilize by the end of the year, with the current price standing at 8.5 million UZS or approximately 5,500–6,000 UZS per liter, Bakirov emphasized that blaming gas stations for the price hike is unjustified, as competition exists among them. He pointed out that the lack of competition at the top is the real problem contributing to price fluctuations in the propane market.
