Gasoline costs €1.6 in Europe, but income is 6-8 times higher than in Azerbaijan

Baku/13.06.22/Turan: At night on 13 July there appeared information about the growth of gasoline prices for brands AI-95 and AI-98.

Prices for 1 liter of AI-95 gasoline rose by 40 kopecks to 2 AZN and 30 kopecks to 2.3 AZN for AI-98.

AI-95 and AI-98 gasoline is not produced in Azerbaijan and is imported. Officials say that the rise in world oil prices affects the price for gasoline of this brand; the prices for this type of fuel in the country are regulated by the market and the state does not interfere with these prices.

According to "SOCAR Petroleum", at present just 9 percent of the gasoline consumed in the country is premium AI-95 and super brand AI-98. "The sharp rise in oil prices since last year, as well as a significant growth in transportation costs amid global inflation, are some of the biggest factors contributing to the price change."

Ilham Shaban, head of the Petroleum Research Center, told Radio Azadlig that the reason for the rise in prices for gasoline of "AI-95" and "AI-98" was the rise in oil prices. "The last time gasoline prices rose in September last year, the price of oil was $75, and in late January of this year the price for oil has already risen to $90, and in March-already to $135. In the following period, the average price for oil was $105. If the price for oil rises by a few dollars in 10 days, refineries will adjust prices."

At the same time the expert pointed out that for some reason gasoline prices have changed only now, although in the period after the last increase in the price of AI-95 time the price for oil rose by $ 30 per barrel. "Why hasn't the price gone up? I wonder why they have kept prices the same during this time, if prices are not regulated by the state? If, as the officials say, the prices for this type of gasoline are regulated by the market, then gasoline prices should have risen as early as February. It turns out that the company, which was selling this gasoline in the country, sold gasoline at a loss for 5 months."

Economist Rashad Hasanov said that citizens of Azerbaijan should demonstrate the same attitude towards AI-95 and AI-98 gasoline as towards other goods and services, prices for which are regulated in the market. "There is such an approach that the prices for certain types of gasoline are not regulated by the Tariff Council, these products are imported, and their price is determined by the entrepreneur in the market. But the state must use all available tools to fight against inflation, including these types of products."

The expert noted that despite the fact that in 2012-2013 the Azerbaijani government voiced a position regarding the production of gasoline of this brand in the country and began repairing the local oil refinery in order to bring it in line with modern requirements, so far there has been no progress in this direction. "According to the latest information, the refinery will be commissioned in 2023; however, most likely then it will only be possible to produce AI-95 gasoline. In any case it is impossible for the Tariff Council to set a fixed price for this type of fuel in the next 3-4 years.

According to him, there are inappropriate moments, although the explanations for the increase in gasoline prices seem to be clear. "Naturally, oil prices in the world have risen, which affects the price for imported gasoline. But the problem here is that the principle of fairness is not ensured in the market. There is no competition in the market, one company brings these products to Azerbaijan. This also prevents the formation of prices based on the principle of competitiveness. If the price for this product is not regulated by the Tariff Council, then ensure appropriate market principles, remove the artificial obstacle to the growth of the number of players. This will lead to a search for the optimal price and will be to the benefit of people.

The expert noted that two days before the rise in the price for AIP-95, in the pro-government media began a campaign justifying the inevitability of the price increase. "There is a comparison with prices in Europe. But you can not just look at the price of fuel. In Europe, the price for fuel was $1.6, but compared to Azerbaijan, their incomes are 6-8 times higher."-0-