Lower gas sales to Russia have cut gas output. Natural gas extraction was 16.7bn cu metres in the first quarter, a decline of 4.1% year on year. Furthermore, other parts of the oil and gas sector are also performing poorly. Output of liquids (oil and gas condensate) was 900,000 tonnes, a fall of 7.9% year on year, following a drop in output of 17.8% year on year in 2010 as a whole. This has resulted in costly imports of crude and refined products, particularly in view of high global prices. Imports of fuel and energy products more than tripled in January-March 2011 compared with the year-earlier period.

One of the main problems in Uzbekistan has been the mispricing of energy resources and state control of the sector. The result has been shortages even in times of ample output, owing to widespread inefficiency. In order to address these issues, the authorities are planning a three-year, US$75m upgrade of the Bukhara oil refinery, to enable the production of higher-quality petrol. The cost will be financed by the Fund for Reconstruction and Development (FRD), which has in turn been funded by the revenue windfall that Uzbekistan has enjoyed for its gas exports in previous years.