TURKMENISTAN GAS PRICE HIKE: BEHIND THE SCENES

C O N F I D E N T I A L ASHGABAT 000188 SIPDIS SIPDIS STATE FOR SCA/CEN, EEB PLEASE PASS TO USTDA DAN STEIN ENERGY FOR EKIMOFF/THOMPSON COMMERCE FOR HEUPER E.O. 12958: DECL: 07/20/2017 TAGS: PGOV EPET EFIN TX SUBJECT: TURKMENISTAN GAS PRICE HIKE: BEHIND THE SCENES AT THE CABINET OF MINISTERS REF: ASHGABAT 0076 Classified By: CDA RICHARD E. HOAGLAND: 1.4 (B),(D) ¶1. (C) A long-time Embassy diplomatic source, who has resided in Ashgabat for many years, told us a behind-the-scenes account of what happened following President Berdimuhamedov's announcement at a January 11 cabinet meeting that Turkmenistan would introduce higher gasoline prices (reftel) that he claimed to have received afterwards from six people who attended the meeting. According to this source, after the meeting, Deputy Chairman of the Cabinet of Ministers for Foreign Affairs Rashit Meredov walked out of the Cabinet of Ministers building and sent his car away. He walked the six blocks to his office at the Ministry of Foreign Affairs with his head hung low, apparently completely preoccupied considering what domestic problems a rise in gas prices would bring to Turkmenistan. ¶2. (C) The six mentioned above who attended the meeting also sent their cars ahead and walked together, wondering where the idea that instigated this announcement originated. Noting that Deputy Chairman of Oil and Gas Tachberdi Tagiyev had presented this idea to Berdimuhamedov, who in turn tasked Tagiyev with implementing the move from subsidized gas to market prices, the six speculated that the Russians may have introduced the idea to Tagiyev, perhaps in order to create instability in Turkmenistan. After returning to their offices, they decided to call our source and invite him to meet with them to get his views on the gas-price hike. ¶3. (C) COMMENT: If accurate, this is a remarkable insight about Turkmenistan-Russia relations that senior ministers would consider conspiracy by Russia. We are also intrigued that high-level ministers now feel comfortable enough to share their own reservations about policy and their internal discussions with a Westerner. ¶4. (C) COMMENT CONTINUED: Turkmenistan's citizens have come to feel strongly that access to practically free gasoline is a right -- a part of the social safety net introduced by former President Niyazov -- and they are concerned about the inflationary pressures caused by higher prices for gasoline. In addition, since the average wage is $100-150/month, raising the price of gas to possibly as much as $1/liter, would pose a major strain on most family budgets. This demonstrates that Turkmenistan's top leadership is talking and thinking, at least among themselves, even if not with Berdimuhamedov. This could explain why the topic of a gasoline price hike has disappeared from the agenda in recent weeks, since ministers may be deliberately trying to slow down a plan that they disagree with. Or it could be that some have been chatting with Berdimuhamedov. END COMMENT. HOAGLAND