Uzbekistan depletes 2024 gas subsidies in record time
Subsidies in Uzbekistan’s Energy Sector Make Up Majority of State Budget Allocations
In the first half of 2024, subsidies allocated from the state budget to the energy sector represented a significant portion of all subsidies, totaling 70.2%. According to a report by the Ministry of Economy and Finance, a total of 15 trillion 351 billion UZS was allocated for subsidies during this period.
The majority of the subsidy funds were utilized for various purposes, including covering the losses in the natural gas market, subsidies for preschool educational institutions, and support for heat supply enterprises. The report revealed that of the 9.5 trillion UZS annual subsidy for gas, 9.3 trillion UZS had already been utilized, accounting for 98% of the total allocation. Similarly, out of the 1.9 trillion UZS subsidy allotted for heat supply enterprises, 1.47 trillion UZS had already been spent.
Gas imports saw a significant increase during this period, amounting to $809 million, which is five times higher compared to the same period in 2023. This surge in gas imports has contributed to the high utilization of gas subsidies.
One notable point highlighted in the report is the allocation of 192 billion UZS for subsidizing passenger transport in electric trains. The ticket prices for “Afrosiyob” electric trains saw significant increases in 2023 and 2024, with no funds allocated for subsidizing electric trains in the current year.
The escalating amount of subsidies allocated annually, from 5 trillion 629.8 billion UZS in 2021 to 29 trillion 255 billion UZS in 2023, has led to the expansion of the state budget deficit and an increase in external debt. The state budget deficit exceeded 34 trillion UZS in the first half of 2024, marking almost a 27% increase from the previous year.
Overall, subsidies in the energy sector continue to play a crucial role in the state budget allocations in Uzbekistan, indicating the government’s focus on supporting key industries and addressing economic challenges.
