en.Wedoany.com Reported - Kyrgyzstan has approved the construction of a small-scale oil refinery in the southern part of the country, with an investment of $25 million, aiming to boost domestic fuel production and reduce import dependence amid tightening Russian supplies.

Kyrgyzstan signed a construction agreement with the China-Kyrgyzstan joint venture Central Asian Energy LLC, which will finance the project. The refinery has an annual capacity of 450,000 metric tons.

The refinery will produce gasoline and diesel meeting K5 and K6 environmental standards, as well as asphalt and engine oil. The first phase is scheduled for completion in the fall of 2026.

Kyrgyzstan is heavily dependent on imports for petroleum products, with over 90% of its gasoline coming from Russia. Since late May, Ukrainian drone attacks on Russian refineries have led to production cuts, causing Russia itself to face fuel shortages.

At the end of June, the Kyrgyzstan Oil Trade Association reported shortages of domestic AI-95 and AI-98 grade gasoline due to supply restrictions from Russia and increased seasonal demand.

To stabilize the fuel market, Kyrgyz authorities have taken a series of measures in recent weeks, including implementing temporary price controls, subsequently lifting state price regulation on AI-95 gasoline, and issuing a ban on petroleum product exports.

Kyrgyzstan is also awaiting fuel deliveries from China and Belarus. Additionally, the Ministry of Energy stated that it has reached an agreement with neighboring Uzbekistan to process some petroleum products at Uzbek refineries before shipping the finished products back.