Retail Prices for Gasoline Increased

Baku / 15.07.17 / Turan: Since July 15, the retail price of AI-92 automobile gasoline has been increased by 28.5 percent in Azerbaijan. This decision was adopted by the Tariff Council the day before.

According to this decision, announced at midnight, from July 15, the retail price of motor gasoline of the brand AI-92 rose from 0.7 manat (0.41 dollars) to 0.9 manat (0.53 dollars) per 1 liter.

The rise in prices is explained by the need to improve the quality of motor fuel produced, improve the environment and expand investment opportunities to meet domestic demand, modernization and reconstruction of the oil refining industry. In addition, according to the decision of the Tariff Council, the growth of domestic demand for gas has limited the export opportunities of SOCAR (State Oil Company of Azerbaijan) and reduces income in foreign currency.

As the Tariff Council notes, even after the current increase, the price of AI-92 gasoline in Azerbaijan will be lower than in other CIS countries and the region. In particular, it is reported that the cost of 1 liter of gasoline in Georgia is 0.86 dollars, in Russia - 0.61 dollars, in Belarus - 0.59 dollars, and in Ukraine - 0.98 dollars.

According to the economist, co-founder of the Center for Economic Research, Gubad Ibadoglu, the rise in price will not be limited to gasoline AI-92, but will touch other brands of gasoline and diesel fuel.

"The rise in price of gasoline will have two effects - psychological (panic) and economic (increase in costs). The psychological effect will be short-term, while the economic impact will be long-term and sustainable. In conditions of a sharp rise in price of gasoline "it is impossible" to maintain stable transport tariffs. Therefore, we should expect an increase in the cost of services, primarily in the area of ​​passenger transportation - taxis and public transport (intra-urban and intercity).

Along with this, the increase in costs for road, air and sea transport will play a driving role in the rise in price of basic consumer goods. Thus, in the second half of the year, inflationary processes will be further accelerated. For information, I note that, in the first half of the year, inflation was 13.9 percent," Ibadoglu wrote on his Facebook page.

The economist Samir Aliyev considers incorrect the emphasis of the Tariff Council on the fact that even after a rise in price gasoline in Azerbaijan will be cheaper than in other post-Soviet countries. He draws attention to the fact that of the countries indicated by the Tariff Council, only Russia is an oil producer. "Now, gasoline costs 53 cents, that is, more expensive than in Kazakhstan. Belarus, albeit a non-oil-producing country, gasoline is only 6 cents more expensive there than in Azerbaijan," the expert says. -06D--