AI-95: the state is playing a dishonest game

Baku/13.07.22/Turan: The price of AI-95 premium gasoline has increased in Azerbaijan. A liter of this brand gasoline, which until today cost 1 manat 60 gepiks, will now be sold for 2 manats. The increase in the price for "premium" gasoline in Azerbaijan  is explained by the fact that it is not produced here and its price depends on the price of oil on the world market.

Economist Rashad Hasanov shares his opinion on the price increase in the “Difficult Question” program.

In fact, a decline in oil prices on the world market is observed  over the last  two weeks.  According to him,  the  increase for oil price  began in February against the backdrop of the Russian-Ukrainian war.

“In May, prices reached their peak. Thus, a barrel of Brent oil traded at $135. Now, against the backdrop of recession risks and conservative government policies, reaching agreements with non-OPEC countries, as well as changes in supply and demand in the market, Iran's oil supply to China at dumping prices, prices began to decline. Today the price has dropped to $100 per barrel. All this indicates a price correction in the market. Therefore, I consider this explanation incorrect,” Hasanov said.

The expert emphasized that prices for AI-95 and AI-98 gasoline should be formed not by the Tariff Council, but by the market. “But, if this is so, then the agitation campaign held recently in the media in support of the increase in prices for these types of fuel cannot but cause bewilderment,” he said. According to the economist, citizens are being misled.

“Comparison of fuel prices in our country and in other countries should be carried out on the basis of some methodology - either on the basis of the share of fuel in the structure of the family budget, or in comparison with family income. Otherwise, comparison of gasoline prices in Azerbaijan and the US becomes absurd. The average income in the US today is $2,500, and in Azerbaijan it is $400-500. In the regions of the country, incomes are even lower - they do not amount to about $ 200. Therefore, a comparison with the United States is inappropriate,” he argues.

According to Hasanov, it is inappropriate to compare gasoline prices in Azerbaijan with countries with high energy dependence. “The state itself is well aware that it is playing a dishonest game, since there is only one fuel supplier on the market. And if so, then prices cannot be formed on a market basis. This is clear to everyone,” the expert is sure. –0—