Turkmenistan To Revoke Free Utilities For Its Citizens

Turkmenistan’s President Gurbanguly Berdymukhammedov has ordered his cabinet to revoke public benefits that have provided the country’s 5.3 million citizens with free electricity, gas, and water for the last 25 years.

“The system of benefits in the country has become completely ineffective”, the president said at a meeting with high-ranking officials from the country’s banking and financial sectors on Tuesday.

“Benefits should be provided not to anybody, but only to those who really need social assistance,” Berdymukhammedov underlined, according to the state news agency Turkmenistan Today.

Berdymukhammedov has instructed his Deputy Prime Minister for Finance and Economics Khojamammedov to prepare proposals for cancellation of the benefits.
  
Federal subsidies were introduced into natural gas-rich Turkmenistan in 1993 by late president Saparmurat Niyazov. Currently, the state provides every Turkmen citizen with 35 kilowatt hours of electricity and 50 cubic meters of natural gas each month, and 250 liters of water per day. By comparison, a typical American household uses about 30 kilowatt hours a day of electricity, while each person uses about 300-387 liters of water per day.

A decline in gas prices and losing two big customers, namely Russia and Iran, have affected Turkmenistan’s economy. In January 2016, Russia suspended imports of Turkmenistani gas after a price dispute severed already-strained relations. From January 2017, Turkmenistan halted gas exports to Iran, demanding to settle debts that amounted to over $1.8 billion.

Turkmenistan holds the world’s sixth largest natural gas reserves – its number one export – estimated at 50 trillion cubic meters according to some estimates, along with 600 million barrels of proven oil reserves.  Earlier this month the head of the state-controlled, Turkmengas Company announced that the country will export 38 billion cubic meters of gas in 2017, which is nine percent more than what it exported last year. The Central Asian and Caspian country is China’s largest supplier of gas.

Turkmenistan may in the future link its gas pipelines to the Southern Gas Corridor, a Eurasian mega-pipeline that will bring Caspian region gas to Europe via Azerbaijan, Georgia, Turkey, Greece, Albania and Italy. The 300 kilometer-long subsea Trans-Caspian Gas Pipeline would deliver natural gas from Turkmenistan and Kazakhstan to Europe by linking to the Southern Gas Corridor’s starting point in Baku, Azerbaijan.