A rise in gas prices to provoke a rise in electricity prices

A meeting of the Tariff Council of Azerbaijan (TCA) approved a new system of differentiation of natural gas prices for the population on Wednesday. Economist Natig Jafarli explained reasons for the transition to the new system and its consequences in the TURAN News Agency "A Difficult Question" program.

"An early January meeting of the Tariff Council decided to raise tariffs for A-92 gasoline, diesel fuel and drinking water. At the same meeting, SOCAR asked to increase gas tariffs. Then they did not dare to raise tariffs for four positions at once fearing the discontent of the population. Nevertheless, SOCAR's appeal was announced. Now, after 6 months, an increase in gas tariff has been announced," the expert said.

According to the decision of the Tariff Council, from July 1, 2021, the cost for one cubic meter of gas for the population whose annual consumption does not exceed 1200 cubic meters, will be 0.1 manat (previously 2,200 cubic meters per year).Jafarli drew attention to the fact that the government recognizes that the increase will affect about half of gas subscribers in Azerbaijan (about 49%, or 5 million people). This means that another half of subscribers will exceed the limit and be forced to pay twice as much for gas.

Thus, for 1000 cubic meters above the limit of 1200 cubic meters you will have to pay 200 manats which is about 120-122 dollars. This is not much different from prices for gas sold abroad by Azerbaijan. This figure violates the rights of the Azerbaijani people to use natural resources of their country, Jafarli believes.

"Trying to justify the increase in tariffs, the Tariff Council and the government claim that this was done in order to save gas. This is akin to the fact that a fruit seller tells customers: If you buy more fruits from me, I will raise the price. No one will burn gas or use electricity for nothing to pay for it, " the economist is sure.

To his thinking, the only reason to raise gas prices is the desire to continue the process of shifting a part of the financial burden of the government on the citizens people which started in January. One of the items of this decision is to increase tariffs for electric modular stations running on gas from 0.12 to 0.13 manats.

"At first glance, it may seem that the figure is not big; however, for the production of electricity, gas is consumed in larger volumes which affects the cost of electricity. The growth will be about 8% which will lead to rise in the electricity tariff," Jafarli warned adding that state-owned companies do not give explanations - how and on what methods they calculate prices for their products.

"SOCAR should give explanations. We should not forget that since 2003 when a major oil project began operating, Azerbaijan has been receiving free-of-charge associated gas from the Azeri-Gunashli-Chirag fields," he stressed.

The expert is sure that such a government policy will result in the fact that the population in country's regions will decline from gas consuming and start cutting down forests. And this, beyond any doubt, will deal a blow to the environmental security of the country.-0-