Kazakhstan’s PetroCouncil — an oil and gas industry association representing about 150 domestic oilfield service, engineering and manufacturing companies — has appealed to Prime Minister Olzhas Bektenov to protect local firms from what it calls dumping by Chinese companies in Kazakhstan’s petrochemical sector.
Crowding out
The council notes that foreign contractors, primarily from China, are increasingly involved in large industrial and petrochemical projects across Kazakhstan. These companies reportedly offer services at prices up to 70% below market rates, effectively crowding out domestic enterprises.
To address the issue, PetroCouncil aims to limit price dumping by setting a threshold of no more than 20% below the average market price in tenders. They argue that this measure will help domestic businesses remain competitive against significantly lower-priced offers. They also propose increasing the weighting of the «Kazakhstani content» criterion when evaluating bids to further support local firms in securing contracts.
Best price
Additionally, the council urged the introduction of a «second best price» principle. This principle prioritizes domestic firms with bids that are close to those of foreign competitors, potentially enabling more local companies to win tenders.
PetroCouncil further proposed creating a five-year register of domestic producers for petrochemical projects and exempting them from customs duties on raw materials used to manufacture equipment. According to the council, these steps are designed to help domestic producers participate in more projects, reduce their costs, and encourage the growth of Kazakhstan’s technological base.
