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TheStreet Open House

Turkmenistan Ending Free Gas for Citizens

ASHGABAT, Turkmenistan -- Turkmenistan's president said Saturday his government will begin installing gas meters in households, ending the unlimited supply of free gas to citizens in the energy-rich Central Asian nation.

President Gurbanguli Berdymukhamedov said during a televised address the government hoped the meters would encourage people to consume energy more efficiently, but neither he nor the country's state-owned gas company gave a timeframe or a reason behind the policy change. The government also didn't immediately reveal how much it will charge for gas.

The move comes in the wake of signs that Berdymukhamedov's authoritarian government sees the subsidized domestic energy market as too heavy an economic burden, and is making profitable energy exports a bigger priority.

The nation is estimated to have the world's fourth-largest natural gas reserves, and gas, electricity and water have been supplied free to households since 1993. In 2006, the same year Berdymukhamedov became president, the country's rubber stamp parliament voted to extend the free energy policy until 2030.

The free gas has been the carrot to the stick of Berdymukhamedov's regime, which has allowed no dissent or independent media in the predominantly Muslim nation of 5 million people. Berdymukhamedov, nicknamed Arkadag (the Protector), won by a landslide 97 percent in 2012 presidential elections, in a vote widely criticized by election monitoring groups.

The government has made it clear in recent months the domestic subsidies are too costly. At a conference in October attended by Berdymukhamedov, one delegate publicly announced that free gas to the country's citizens cost Turkmenistan $5 million each year.

"The installation of the meters will allow people to economically consume natural gas, while the maximum payment for using the gas will not create difficulties for the population, for each family," Berdymukhamedov said during the televised address.

In an issue of a government newspaper released Saturday, Turkmenistan's state-owned gas company encouraged citizens to install the gas meters, which would enable the population to "normalize" energy consumption.

Berdymukhamedov's regime has simultaneously encouraged energy exports, particularly with China. In September, Turkmenistan struck a deal that would increase its gas exports to China to 65 billion cubic meters per year by 2020, up from 25 billion cubic meters this year.

Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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