TURKMENISTAN: CITIZENS UPSET OVER GAS PRICE RISE

C O N F I D E N T I A L SECTION 01 OF 02 ASHGABAT 000239

SIPDIS

SIPDIS

STATE FOR SCA/CEN AND EEB
PLEASE PASS TO USTDA DAN STEIN
ENERGY FOR EKIMOFF/THOMPSON
COMMERCE FOR HUEPER
TREASURY FOR BAKER/LANIER

E.O. 12958: DECL: 02/14/2018
TAGS: PGOV EPET ECON TX
SUBJECT: TURKMENISTAN: CITIZENS UPSET OVER GAS PRICE RISE

REF: A. ASHGABAT 0213


B. ASHGABAT 0188

Classified By: CDA RICHARD E. HOAGLAND: 1.4(b),(d)


1. (C) SUMMARY: Contrary to assertions that Turkmenistan's
Deputy Chairman of the Cabinet of Ministers for Oil and Gas
Tagiyev made during a February 13 cabinet meeting, efforts to
raise gasoline prices by almost 800% (reftel) are not going
well. As-yet unsubstantiated rumors of unrest focused
against hydrocarbon sector facilities are surfacing, and
there are reports citizens are having problems getting the
coupons that would at least allow them 120 liters of free
gasoline a month. However, gasoline stations in Ashgabat
seem to be quiet, although lines are longer than usual. A
mid-level employee at the Ministry of Oil and Gas has said
that there is discussion at the Ministry that the gas price
could be lowered to 1,000 manat per liter (from the current
3,100 manat) on March 1 -- and that Tagiyev might lose his
job. END SUMMARY.


2. (SBU) Deputy Chairman of the Cabinet of Ministers for Oil
and Gas Tachberdi Tagiyev, who is responsible for developing
and implementing the plan to raise gasoline prices by almost
800% (reftels),reported during a February 13 cabinet meeting
that the roll-out of the new gasoline pricing policy has been
"clear and orderly." However, post is hearing reports that
implementation is not going well. Post heard from a driver
for one of the international school families, who had
returned to his home city of Mary to collect his gas-ration
tickets, that there was a small scuffle outside Mary local
government offices when motorists came to complain about the
new gas policy. The protestors were quickly dispersed.


3. (C) We are also hearing sensational but unsubstantiated
rumors that angry private motorists set gas stations on fire
in Balkanabat, Dashoguz, and Mary to protest the price
increase, and there is one unsubstantiated report that
someone in Balkanabat may have damaged a presidential
portrait. One USAID local employee reported that a nurse who
works for her heard from her family in Mary Province that the
driver of a gasoline tanker truck in Mary was attacked and
beaten, and the gas stolen. The same nurse reported that she
had also heard from her family of an attack on a gas station
in Mary in which an attendent was beaten.


4. (SBU) Banks are handing out six months worth of gas
coupons (February-July),and recipients reportedly are being
told that they must use the February coupons by the end of
the month, or or they will be useless. Lines at the few
banks that are giving out the coupons are very long. (NOTE:
The government has authorized about one bank per
administrative district in Turkmenistan to hand out the
coupons. END NOTE.) One individual was told when he went to
get his gas coupons February 13 that there were 400 people in
line ahead of him. He could wait, if he had the time, but it
would be better to come back later. Many are choosing to
wait, especially if they filled their car tanks the weekend
of February 9.


5. (SBU) Lines at Ashgabat gas stations were long on
February 14. Following up on a rumor that one gas station
had put up a sign that gas was 1,200 manat per liter, an
EmbOff found that gas stations are still selling gas at the
3,100 manat-per-liter rate. Some customers are using the
"free gas" coupons, but most are still offering up cash. The
situation was quiet, although drivers already waiting in line
started honking any time new drivers started trying to cut
in. When EmbOff asked the gas station attendants whether the

ASHGABAT 00000239 002 OF 002


price was going to decrease, they looked heavenward and said,
"If God grants."


6. (C) A mid-level official at the Ministry of Oil and Gas
told an embassy FSN February 12 that there was some
discussion at the Ministry about a possible price decrease to
1,000 manat on March 1. According to this official, Deputy
Chairman Tagiyev, whose idea it was to increase the price in
the first place, could either be fired or demoted. However,
there reportedly has been no discussion of who could replace
Tagiyev if he has to take the fall for a highly unpopular
policy.


7. (SBU) COMMENT: The heavily subsidized gas prices were
one of the cornerstones of the extensive social safety net
that former President Niyazov used to keep Turkmenistan's
population quiescent during the darkest days of his
administration. Although many foreign experts have agreed
that eliminating the subsidies is necessary for
Turkmenistan's economic development, we doubt that their
recommendations are behind Tagiyev's proposal about raising
the price. More likely is Tagiyev's need as Turkmenistan's
hydrocarbons czar to come up with money to help fund
refurbishment of old hydrocarbon wells and to drill new ones
and other critically needed infrastructure projects. While
Post cautions about putting too much credence in the most
sensational rumors of unrest until it has been able to
confirm the stories -- the behavior being described is highly
uncharacteristic for the people of this country, who have
endured many troubles over the last 15 years -- the very fact
that these rumors are beginning to surface show just how
strong the dissatisfaction with these price increases is.


8. (SBU) COMMENT CONTINUED: President Berdimuhamedov does
seem to have his ear to the ground, however, and he has
plenty of options if he judges that the situation is getting
out of hand. The easiest would be to fire Tagiyev (putting
the blame on him),who is a proficient technocrat without any
people skills, and greatly decrease the price. Rumors of
Tagiyev's imminent demise have been around for months. This
time, they just might be true. Or he might yet again
survive. END COMMENT.
HOAGLAND