Kazakhstan's government has agreed not to introduce additional excise duties on petroleum products from January 1, 2027, which would have raised rates to 95% from the current 50%, after the PetroMining association made its case, infohub.kz reports.

Under current rules, oil and gas companies must pay 50% of any increase in the price of petroleum products. To illustrate, if a liter of AI-92 gasoline or diesel rose by six tenge — as seen at some large filling station chains in Astana in September compared with August — the state took three of those six tenge as excise duty.

The government had wanted to collect 95% of any price increase, meaning 95 tenge out of a hypothetical 100 tenge rise, effectively wiping out the point of higher prices for market players.

"Earlier, the PetroMining association reported on the risks of a higher tax burden for wholesale suppliers of petroleum products through an increase in additional excise rates, with 95% of the resulting margin being taken instead of the current 50%. The amendments to government resolution No. 1049 took effect on September 1 of this year and are open-ended... As a result, the prime minister decided to suspend this measure from the beginning of 2027," the association said in a statement, without specifying for how long the introduction of the 95% additional excise duties has been suspended.

The industry association noted that raising the additional excise rates and taking 95% from wholesale petroleum product suppliers (WPS) effectively nullifies the effect of the government's liberalization of fuel prices. This comes amid declining sovereign oil production and a heavy social burden on WPS.

PetroMining believes the 95% rate would cause significant damage to the economy of subsoil users.

The levy could have averaged:

in 2027: 22,027 tenge per tonne of oil,

in 2028: 39,675 tenge per tonne of oil.

During the association's contacts with government agencies, the government was fully informed of the risks of applying the higher excise rates.

PetroMining's calculations and justifications, along with a collective appeal from WPS, were sent to the head of state and the government's economic bloc. Work was also carried out with the Atameken National Chamber of Entrepreneurs, KazMunayGas, the Ministry of Energy and the media.

Following the government's decision, PetroMining thanked Prime Minister Olzhas Bektenov, the Atameken National Chamber of Entrepreneurs, the Ministry of Energy and KMG for an objective review of the issue, its prompt handling and the fair decision taken with respect to oil sector entities.