On September 12, President of Uzbekistan Shavkat Mirziyoyev signed a decree to reform the system of supplying liquefied petroleum gas (LPG) to the population and to gradually introduce market mechanisms. The main goals of the reform are stable LPG supply to the population, efficient use of resources, attraction of private sector and investment, reduction of cross-subsidization, and transition to targeted social support.
LPG-Trade will be established under Hududgaztaminot. It will become a specialized operator for supplying LPG to the population and must ensure financial transparency in this area. At the same time, the government was tasked to develop a market liberalization strategy with the involvement of international consulting companies. Market mechanisms will be introduced gradually, while the priority of LPG supply to the population will be maintained.
Gas produced by enterprises and imported, except for volumes sold through their own networks, must be sold only through the exchange. Suppliers of gas to the population may purchase it from the exchange and directly from imports. At the same time, LPG-Trade is prohibited from importing LPG. A gradual abandonment of cross-subsidization and the formation of a competitive environment with the involvement of private business are also envisaged. During the transition to new mechanisms, financial assistance must be provided to socially vulnerable groups.
Cross-subsidization is when a low price for one group of consumers is effectively covered by another group. For example, gas is sold to the population below its real cost, and the shortfall is covered by higher prices for business or other consumers. The price difference associated with supplying LPG to the population at state-regulated retail prices, as well as economically justified costs, will be compensated to LPG-Trade from the republican budget.
From November 1, 2026, a new system for purchasing and supplying LPG to the population will be introduced. Gas produced by Uzbekneftegaz and Lukoil Overseas Supply and Trading Ltd will be fully placed on a separate trading platform of commodity exchanges. Importers may voluntarily sell their products on this platform. LPG-Trade will purchase gas from this platform to supply the population. If volumes are insufficient, the company may purchase additional gas through open exchange trading. At the same time, gas for social sector facilities will be supplied by LPG-Trade at exchange prices formed on the basis of market principles. After the population supply is fully transferred to market mechanisms, it is proposed to close the separate exchange platform.
The Ministry of Economy and Finance, the Ministry of Energy, and the National Investment Fund were tasked to develop, within three months, a strategy for privatizing LPG-Trade assets with the involvement of international consulting companies. The government was also tasked to begin gradual privatization of the company's regional branches as ready-made projects. To reorganize the LPG supply system, LPG-Trade will receive a loan of 200 billion soums from the republican budget.
From October 1, 2026, an experiment will begin in Andijan region. Under it, private companies will be able to directly import LPG and sell it to the population in household cylinders at free prices. The experiment will operate in parallel with the LPG-Trade system. At least two private operators must participate in the project. They must have their own or leased capacities for transportation, reception, storage, and distribution of gas, the necessary licenses and permits, as well as trained personnel. Companies must also launch a mobile application that enables online provision of operator services to consumers. Operators are allowed to organize points for storage and sale of gas cylinders. The Andijan regional administration was tasked to allocate free land plots for this if necessary. At the same time, joint use of infrastructure by private operators and LPG-Trade is not allowed. The Tax Committee and the Customs Committee must introduce separate accounting of imported and sold gas within the experiment. In the future, this model can be gradually applied to other regions in agreement with the Cabinet of Ministers.
The government was tasked to approve, within one week, a decision establishing the retail price of LPG for the population and the maximum price for its delivery service. In addition, the Cabinet of Ministers must approve a mechanism for targeted social support to socially vulnerable groups, the procedure for private operators in Andijan region, a unified railway tariff for transportation of local gas for the population, as well as rules for calculating budget subsidies for LPG-Trade.
As announced at a meeting under the president on September 7, currently about 3.8 million people and nearly 2,000 social sector facilities in the republic are supplied with LPG. This year, 604,800 tons of LPG are planned to be supplied for the needs of the population and social sector facilities. At the same time, 22% of consumers receive LPG with a delay of more than 46 days. As a result, the population is forced to purchase additional volumes at auto gas filling stations at market prices. In such cases, the monthly expenses of some families are several times higher than the current established price.
Source: www.gazeta.uz