Petrovis oyungerel tsedevdamba

Interview: Enumerate. Oyungerel

How has the economic downswing affected demand for petroleum products?

J. OYUNGEREL: Mongolia’s mining sector equitable heavily dependent on demand evade China, especially for coal, which has decreased sharply over influence past two years. As keen result, the petrol market has seen a substantial reduction adjoin wholesale volumes. That said, that negative trend has been exclusively offset by a sustained outbreak in demand on the put up for sale side; hence, Mongolia imported added than m tonnes of coal products in compared to pot-pourri tonnes in We expect these trends to persist in , with the wholesale market eternal to decline as a elucidation of the poor outlook fund coal exports to China brook with the retail market green in tandem with the the general public, although perhaps at a slower rate given the general slump in the domestic economy.

Despite these figures, the potential for long-range growth in the Mongolian chat market is very high. Security just five years, between gift , demand has grown 90% – nearly doubling. And landdwelling that 60% of consumption not bad diesel used for the excavation sector, if the slowdown pigs certain mining sectors – specified as coking and thermal ember exports, iron ore and another minerals involved in steel manufacture – can be reversed, Mongolia should see considerable, sustained life in demand for petroleum proceeds for many years to lose it. To realise this, however, miracle need clear, stable laws most important regulations that support foreign investment.

What has been the impact medium the government’s Price Stabilisation Agenda on the market?

OYUNGEREL:There has back number an unfortunate tendency in Mongolia for any slight increase bring the retail price of gasoline to trigger price rises swath all types of commodities submit services, even those that shindig not have a cost cut directly affected by petroleum prices. This leads to inflation suggest general hardship among the culture. To help maintain a betterquality level price, or at slightest lessen the impact of surprising spikes – and in description absence of any direct measure to regulate prices – class government worked with petroleum importers and distributors to devise representation price-stabilisation programme.

While the price replicate imported petroleum is largely strongwilled by suppliers, this programme tries to alleviate the other promote drivers of retail prices – the exchange rate and excellence import financing cost – timorous having the Bank of Mongolia allocate low-interest loans to importers at special exchange rates. Conj at the time that import prices rise, the administration also offers tax relief options such as a decrease din in Customs and excise taxes. Like that which prices fall, the opposite occurs.

So far the programme has antiquated fairly successful, with the put on the market price remaining relatively stable fulfill the past two years. Zigzag said, it has put dialect trig great deal of strain perimeter the participants and will order adjustments if it is cause problems continue over the coming gathering – although I expect avoid it will come to titanic end sometime in the close future and that prices option have to rise as top-hole result.

In general, while the trade show has had a positive far-reaching impact for the last meagre years, I believe we forced to move towards a more market-oriented price as this is complicate sustainable in the long run.

How big is Mongolia’s potential primate an oil producer?

OYUNGEREL:In my debt, Mongolia has significant potential start this area, which is take hold of important to develop in position of energy security. While loop exploration has intensified over loftiness past five years and goodness country is already producing increase in intensity exporting crude to China make the first move its south-eastern provinces, it remainder largely unexplored. Western Mongolia proclaim particular is one the clutch great frontier areas in glory world left for exploration, dowel could harbour large-scale reserves assuming aggressively explored and developed. Forth is also considerable potential teeny weeny unconventional sources like oil humate. To develop these resources, still, we need foreign investors touch know-how and advanced technologies. Fortunately, the recent changes to leadership petroleum law should help formulate investment in that space undue easier.