Uzbekistan uses up gas subsidies for 2024 in just six months

In the first half of 2024, the amount of subsidies allocated from the state budget amounted to 15 trillion 351 billion UZS, according to a report by the Ministry of Economy and Finance.

In January-June of this year, the majority of the subsidy funds were used for the following purposes:

•  Covering the losses between wholesale purchase and sale of natural gas in the domestic market – 9.3 trillion UZS;
•  Subsidies for non-state preschool educational institutions – 1.55 trillion UZS;
•  Covering the losses of heat supply enterprises – 1.47 trillion UZS;
•  Subsidies for the purchase of housing by the population – 543 billion UZS;
•  Subsidies for passenger transport in public transport – 413 billion UZS;
•  Subsidies for geological exploration work – 377 billion UZS;
•  Subsidies for the agricultural fund – 240 billion UZS;
•  Subsidies to engage the population in entrepreneurship – 211 billion UZS;
•  Subsidies for passenger transport in electric trains – 192 billion UZS;
•  Subsidies for the production and sale of products by livestock, poultry, and fish farming enterprises – 172 billion UZS.

The report indicates that of the total annual subsidy of 9.5 trillion UZS allocated for gas, 9.3 trillion UZS, or 98%, has already been utilized. During this period, gas imports amounted to $809 million, which is five times more compared to the same period in 2023.

Additionally, of the 1.9 trillion UZS subsidy allocated to cover the losses of heat supply enterprises, 1.47 trillion UZS have already been used.

Overall, in the first half of this year, subsidies allocated to the energy sector accounted for 70.2% of the total funds.

Another noteworthy point is that 192 billion UZS were spent on subsidizing passenger transport in electric trains. At the end of 2023, the ticket price for "Afrosiyob" electric trains was increased by 100%. On May 15 of this year, ticket prices rose again by 20% for economy class, 30% for business class, and 40% for VIP class. Interestingly, no funds have been allocated from the state budget for subsidizing electric trains in 2024.

For reference, the amount of subsidies allocated from the state budget was 5 trillion 629.8 billion UZS in 2021, 12 trillion 260.9 billion UZS in 2022, and 29 trillion 255 billion UZS in 2023. The increasing amount of subsidies year by year is impacting the expansion of the state budget deficit and the growth of external debt.

Previously, it was reported that the state budget deficit exceeded 34 trillion UZS in the first half of 2024, which is almost 27% more than the figure from a year earlier.