Why did National Bank not disclose average export price of Azerbaijani oil during manat devaluation?

From January to November 2015 Azerbaijan has exported 29,941,481 tons of oil, down 0.9% against the same period in 2014.

According to the meters of the State Customs Committee of Azerbaijan, during this period 24,421,855 tons of oil was exported via the Baku-Tbilisi-Ceyhan oil pipeline (of which 1,952,274 tons of gas condensate from the Shah Deniz field);

- 3,915,164 tons of oil via the Baku-Supsa oil pipeline;

- 1,186,918 tons via the Baku-Novorossiysk oil pipeline;

-417,543 tons by the railway to Batumi, Georgia.

According to the Customs, from January to November, 2015 the volume of declared exported oil totaled 20,127,926 tons to the amount of $8,259,922,600. Considering this data, during 11months, 2015 average export price of Azerbaijani oil was $410.37 per 1 ton or $55.45 per barrel.

According to the Customs, from January to November 2015 export of oil products from Azerbaijan totaled 1,922,844 tons to the amount of $688,761,076.

On December 21, 2015 Azerbaijan manat has devalued again. As a result since early 2015 the national currency has devalued by 98%. The Central Bank of Azerbaijan (CBA) has explained the second devaluation (48%) by the fact that early this year the devaluation was aimed at preservation of manat rate based on the average oil price between $50.00 and $55.00 per barrel. But the current price was three times less, than it was in 2014.

Based on the Customs data, the National Bank took into consideration actual oil price at the market, but not an average one, during manat devaluation. In 2014 average price of Azerbaijani oil was $101, but during six months this year $59.0 and during 11 months - $55.45.

Most likely the government has been actually idle during this period: it hoped that oil prices will go up, as it happened in 2009. But this did not happen. Since February 2015 the government has not implemented any reforms in the economy and did not make any steps to attract foreign investments into the oil industry. The government also resisted the fact that the country could experience the crisis, because the country” has a unique economic model.” At the enlarged session of the government it was admitted that “the consequences of the crisis are inevitable in Azerbaijan, due to the world crisis and slump of oil prices.”

When the oil price dropped below $100 per barrel in early September 2014, the currency resources of the Central Bank totaled $15.3 billion, but by the second devaluation they already reached only $5.5 billion. However, the government could not explain “why did it need to spend $9.8 billion of resources.”—0—


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