Gubad Ibadoglu: Government Should Neutralize Negative Impacts from Tariff Increases

The current tariff for public transport is most likely transitional and after a while under the pretext of a shortage of 10 gapiks, prices will again be raised and will bring up to 40 gapiks.

This was stated by the head of the Center for Economic Research Gubad Ibadoglu.

Recall that according to the decision of the Tariff Council travel for public transport from August 1 is increased from 20 to 30 gapik.

"This step is likely to cause the rise in price of taxi services and agricultural products and will create a basis for further price increases," he said.

The economist admits that tariffs for public transport in Azerbaijan are one of the lowest in the world.

"However, the subway is the main mode of transport in Baku, where one third of the country lives. The rise in the price of the public transport tariff by 50% will have an impact on inflation, since the fare in the subway is the fifth in the consumer basket for calculating inflation," Ibadoglu said.

According to the economist, most likely after the end of the agricultural season, prices for diesel fuel and fuel oil will be raised.

Ibadoglu believes that the government, in order to neutralize the negative impacts from the tariff increase, must make decisions regarding the regulation of the expenses of people who regularly use public transport.

"I propose to leave for students a travel card at the level of 20 gapik and for this purpose to put into circulation preferential travel cards. In addition, monthly, weekly, three-day and one-day cards for public transport should be sold at preferential prices," Ibadoglu said.

The economist said that if the government really wants a continuous increase in the level of public transport services, then it is necessary to increase the transparency and reporting of the subway, which receives state subsidies, regularly inform the public about the cost of transporting a passenger, the income and expenses of the subway.

"In addition, it is necessary to create a single city transport administration, which should include the subway, and apply the sale of tickets, which can be used for a certain time. Thus, it is necessary to recognize the right of a passenger who once paid to drive for a certain time on different types of public transport." -71D-