Kazakhstan freezes fuel, utility prices as inflation accelerates

By Mariya Gordeyeva and Felix Light

ALMATY, Oct 16 (Reuters) - Kazakhstan's government said on Thursday it was freezing the price of diesel and some petrol, as well as suspending utility tariff increases until the end of the second quarter of 2026, as double-digit inflation continues to accelerate.

In a statement posted on Telegram, the government said price freezes on diesel and AI-92 gasoline would remain in place until inflation stabilises, and that it would work to prevent price increases for what it called socially important food products via increased funding for domestic agriculture.

It also said it would weaken tax collection from small businesses and increase the availability of affordable mortgages.

Inflation in Kazakhstan, a minerals giant which also produces around 2% of the world's oil supply, was 12.9% in September, significantly exceeding that of neighbour and major trading partner Russia, where prices have surged since the outbreak of war in Ukraine.

Kazakhstan's central bank last week raised interest rates to an unprecedented 18%. Other Central Asian countries, with economies closely linked to Russia's, have also suffered inflation spikes since the invasion of Ukraine.

A sudden rise in the price of liquefied petroleum gas (LPG) in January 2022 touched off Kazakhstan's worst unrest since the country of 20 million gained independence from the Soviet Union in 1991.

That year, fuel price protests grew into widespread unrest, which saw hundreds killed and Russian troops deployed to restore order.