If AI-95 Price is Regulated: "First, Diesel… Prices Will Be Raised"

In Azerbaijan, it is expected that the state will regulate the price of AI-95 gasoline. This was mentioned by Rauf Qurbanov, head of the Economics Department at the Ministry of Energy, during a meeting of the Parliamentary Committee on Natural Resources, Energy, and Ecology on November 19, where proposed amendments to the "Law on Efficient Use of Energy Resources and Energy Efficiency" were discussed. According to him, AI-95 could soon be included in the list of goods and services whose prices are regulated by the government.

Regarding pricing, the deputy minister noted that AI-95 gasoline has been produced in Azerbaijan for several months now and is sold at 1.60 AZN per liter.

Over the past years, price increases for AI-92 gasoline (as well as diesel), which are regulated by the Tariff Council, have been attributed to rising global oil prices. However, when oil prices decrease, the price of such fuel does not drop accordingly.

If the government regulates the price of AI-95 gasoline, will there be an increase? So far, no clear response has been obtained from government officials. Moreover, no official data has been provided on production volumes for this type of gasoline. However, back in July, representatives of the Heydar Aliyev Oil Refinery stated that current production fully meets market demand.

Overall, gasoline production in Azerbaijan has declined. According to the State Statistics Committee, 1,201,000 tons of gasoline were produced in the country between January and October, a 0.7% decrease compared to the same period last year.

Rovshan Muradov, a member of the Parliamentary Committee on Natural Resources, Energy, and Ecology, told Turan that the price of AI-95 gasoline is not currently regulated by the state: "Only AI-92 gasoline and diesel fuel fall under regulated prices. As for AI-95, it was previously produced abroad, but now, as far as I know, it is also being produced in our country. That is why its price has decreased (it was previously 2 AZN) and now stands at 1.60 AZN. However, its price is not regulated."

The MP added that if Azerbaijan continues to produce AI-95 gasoline consistently in the future, its price could be regulated: "AI-92 is less environmentally friendly compared to AI-95. Now, with the advent of electric cars, we are trying to reduce carbon emissions into the atmosphere. So, there is truth in what the deputy minister said—they are likely implementing policies in this area."

Economist Zohrab Ismayil told Radio Azadliq that fuel prices in Azerbaijan have never decreased when regulated, but are always increased: "Even when oil prices fell to $38-40, prices here remained high. This is due to the general economic crisis in the country. Prices must constantly rise to show some development figures, achieve growth in GDP, and fill the budget."

According to the expert, a price increase is inevitable in the current situation: "The existing crisis can only be covered by oil revenues."

In Ismayil’s opinion, the price of AI-95 is already high for Azerbaijan: "However, just as all fuel prices are increased by 10-20% annually, this type of gasoline will also see a price hike. I think they will soon claim that the price gap between fuel types is too wide. First, they will bring diesel (1 AZN) and AI-92 (1.1 AZN) prices closer to AI-95 (1.60 AZN). Then, they will say that the price of AI-95 also needs to be increased."

The economist argues that there is no justification for raising the price of AI-95 gasoline: "For an oil-producing country, the current price is not considered low."