Azerbaijani Government Increases Tariffs for Gas and Electricity

The Tariff (Price) Council of the Azerbaijani government on November 28 revised energy prices. These measures are motivated by the introduction of "differentiated system" of payment of utility services.

Thus, the tariff for natural gas for the consumers of the population, the annual consumption of which does not exceed 1,500 cubic meters, is maintained at 0.1 manat per cubic meter.

The use of gas in excess of 1,500 cubic meters to consumers from the same groups will cost 0.2 manat per 1 cubic meter.

For power plants, chemical, metallurgical industry price of 1,000 cubic meters of gas was increased from AZN 80 to AZN 120. For other users of the category "not population» 1,000 cubic meters of gas rose from 100 to 200 manat.
New gas tariffs will take effect from January 1, 2017

In addition, the wholesale price of a kilowatt-hour of electricity was increased from AZN 0.043 up to AZN 0.057.

The retail price of one kilowatt-hour of electricity for consumers whose monthly electricity consumption does not exceed 250 kilowatts / hour has been retained at 0.07 AZN. Over and above the specified amount of electricity consumers will have to pay 0.11 AZN for a kilowatt / hour.

According to the State Oil Company (SOCAR), 62 per cent of the subscribers of the "population" category consume per year less than 1,500 cubic meters of gas.
According to the power distribution company Azerishyg, 72 percent of the subscribers of the "population" category consume less than 250 kilowatts / hour of electricity per month.

However, the accuracy of this information is questionable. For in the absence of central heating in many homes in the winter consumers are forced to heat the apartments either with electrical heaters or Combi systems. In both cases, the electricity and gas are used in excess of 1,500 cubic meters per year and 250 kilowatt / hours per month.

On the other hand, due to the increase in gas prices, tariffs for heating will probably also rise soon.

Therefore, increase in tariffs will hit the financial position of many people.

In general, the rise in energy prices will trigger a new wave of other commodity prices. All this is happening against the backdrop of rapid devaluation of the manat against the US dollar.

Note that the price of electricity has risen for the second time this year. From 15 July the tariffs were increased by 16 percent. Prior to that the general tariff for the population for the use of drinking water and sanitation was  increased from 16 May. -06D--