Mongolia is set to undertake a major fuel reserve expansion to strengthen national energy security. Currently, the country has fuel storage capacity of 440,000 tons, enough to cover approximately one month of consumption. The government plans to build additional facilities to store petroleum products for three to six months. This move marks a significant step toward preventing fuel shortages and supporting Mongolia’s growing energy needs.
Minister of Industry and Mineral Resources Damdinnyam Gongor said that new storage tanks are scheduled for construction next year. Furthermore, the government intends to reintroduce provisions from the COVID-19 law to facilitate public-private cooperation for filling the tanks. Concessional loans will provide low-cost financing for enterprises involved in the project.
Mongolia produces and exports about 560,000 tons of crude oil annually. However, the country imports roughly 220,000 tons of petroleum products each month to meet domestic demand. The mining sector’s rapid growth has increased fuel consumption by approximately 20 percent. Authorities consider fuel reserve expansion essential for ensuring energy stability and maintaining economic continuity.
The government estimates that constructing storage tanks for a one-month reserve currently costs MNT 500 billion. To support businesses in expanding capacity, authorities plan to allocate MNT 50 billion in concessional loans. These loans will encourage private companies to invest in additional storage facilities while reducing financial barriers.
Authorities from the Ministry of Finance and the Ministry of Economy and Development are finalizing the concessional loan mechanism. Their objective is to ensure that Mongolia can maintain sufficient fuel reserves for at least three months, and ideally up to six months, of national demand. This approach highlights the government’s proactive strategy to mitigate potential energy risks.
Experts note that fuel reserve expansion will not only secure domestic energy needs but also enhance Mongolia’s resilience against external market fluctuations. Moreover, the initiative supports the country’s industrial growth by ensuring consistent fuel supply for mining, manufacturing, and transportation sectors.
Minister Gongor emphasized that the fuel reserve expansion project demonstrates Mongolia’s commitment to long-term energy security. He added that cooperation between public authorities and private companies is critical for meeting the ambitious storage targets.
In conclusion, Mongolia’s fuel reserve expansion represents a strategic investment in national security and economic stability. By increasing storage capacity, the country aims to protect against supply disruptions and support continued industrial and commercial growth.
