Monopoly prices for gasoline

From April 3 gas stations moved to new trade rules with high-octane gasoline numbers. Fuel AI-95 increased in price from 80 to 93 kopecks, AI-98 - decreased from 1.5 to 1.03 manat manat (Last imported for premium cars, the number of which is negligible. In 2013, all imported three-wagon Tank A-98).

The Cabinet decision dated 31 March 2014 referred to exclude from the list of types of gasoline (http://www.tariffcouncil.gov.az/?/az/content/109) goods whose prices are regulated by the state. The decision came into force on March 27. On April 2 Tariff Council also considered it necessary to confirm the termination of the rules on a fixed price for gasoline AI-95 (80 kopecks as of December 3, 2013) and above. The reason it is called the cessation of production due to the consumption of small amounts (10% of total weight) and its import from abroad.

According to the experts referred to government decisions are illegal and violate the rights of the consumer. Article 50 of the Constitution of Azerbaijan and AR Law "On receiving information" provide for the right of citizens to free, unrestricted and equal conditions for all to acquire information based on the principles of an open society and democratic state. However, the government did not warn the public in advance and did not provide strong arguments about decisions.

It should be borne in mind that when the government says about 10% share of gasoline A-95 on the market of motor fuel, this means about 120 thousand cars of more than 1.2 million. So we are talking about the interests of the mass consumer.

The second important question concerns the monopolies. The country has a monopoly on the production of oil and petroleum products owned by SOCAR, because there is no reason to talk about market liberalization. In 2013, all gasoline consumed in the amount of 1.3 million tons was produced at the two local refineries SOCAR. For this year, state-owned company planned to increase the production of gasoline and 1, 4 million tons. It is almost more than one ton per year per car. That is, the state-owned company is an absolute monopoly of the local production of gasoline and it dictates prices.

According to the observations correspondent Turan, fuel prices at gas stations also show a manifestation of monopoly. In Azerbaijan, there are dozens of companies that own gas stations. The most famous are: SOCAR Petroleum, AzPetrol, ABU Petrol, and Lukoil. Logically, the price of imported fuel they should differ depending on the volume of supply and marketing policy. However, prices of different brands of the same fuel.

Is this a manifestation of monopoly? Responding to a question, the section head at the State Service for Antimonopoly Policy and Consumer Protection of the Ministry of Economy and Industry Veli Mammadov told Turan that there were drafted the relevant letters to all businesses and individuals associated with this business. "However, we can not require them to change prices because they are independent economic entities," he added.

Strange enough, officers weekly conduct raids in grocery and non-food stores, identifying gaps in the prices, terms and rules of storage. A stop at the gas station can not. This does not mean that the owners of all gas stations in the government work. Simply, they are managed from a single center, inaccessible for checking instances.

Antitrust laws of the country consists of the Constitution, the laws "On antitrust activity", "On natural monopolies" and "On unfair competition", as well as other legal acts. The legislative framework is with no Antitrust Code, suggesting a mechanism of conflict between the final consumer and the business chain.

According to Article 6 of the Law of AR "On Natural Monopolies» (http://www.tariff.gov.az/?/ru/content/59),  in order to regulate the activities of natural monopolies apply controlled prices (tariffs). Violation of this article is the government that is the main producer of fuel SOCAR, which actually regulates the prices of fuel, and no one entity can not sell the goods at a price lower than at the pump state monopoly.

There are two choices - either to be several independent manufacturers of gasoline and other petroleum products to new government standards, or state-owned company should be devoid of the sales network, not to be an interested party. Production of petroleum products is the exclusive jurisdiction of the state oil company, provided that the said law and the law "On the antitrust activities." While there are no private refineries and SOCAR anyway will provide more than 60% of state budget revenues, the situation will not change - experts believe. In their view, such a provision binds implement legislation making laws formal adjunct to the activities of natural monopolies.

According to the founder of the Center for Economic Research Gubad Ibadoglu, gasoline prices in Azerbaijan are unreasonably high. They are slightly lower than in Denmark and Finland, where the average salary is 10 times higher. And despite the fact that the cost of crude oil produced in Azerbaijan is 15 instead of $ 100 per barrel, according to which Europe buys as a feedstock for the production of gasoline. For comparison, in the U.S. the price per liter of petrol "premium" corresponds to 65 kopecks, in Arab countries - 40 kopecks, and Venezuela - 4 kopecks. In other words, the oil-producing countries with a social orientation are to apply reduced rates of domestic demand.

However, the pricing policy around the fuel, and not only that, shows that the Azerbaijani government has failed so far to rise to transparent, socially-oriented partnerships with their citizens. - 17D-