After Removing Gasoline Duty, They Hint at New Rise in Price of Gasoline

By the end of 2018, the Azerbaijani government exempted import of AI-92 gasoline from customs duties (15%), said the decision adopted by the Cabinet of Ministers of Azerbaijan. It looks like the state"s concern for the people, but we immediately recall the year 2017, when in July the same government removed customs duties of 15% on some grades of gasoline, and the order was extended for 90 days. And in August, the gasoline of the AI-95 and AI-98 brands rose in price. Then the government propagandists tried to reassure the people, arguing about the "elitism" of these brands of automotive fuel, meaning that gasoline with an octane number of 95 and 98 is only bought by the rich.

And in August 2016, duties on gasoline AI-92 were removed, for 60 days. In July 2017, this gasoline went up to 90 gapik per liter.

This time, customs duties have been lifted for importers of AI-92 gasoline, which, according to the logic of propagandists, is bought by "poor people" driving Zhigulis or obsolete German cars. By analogy with the last year, a cautious thought appears that the government will soon return the duties, then the price of "national gasoline" (today costs 0.9 manat) will rise as much as the cost of AI-95 twice (today it costs 1.5 manat).

In the summer of 2018, it was announced that the reserves of AI-92 gasoline were sufficient; if they ran out, they would buy it in Russia. It means there would be an import. And then, the Tariff Council would once meet and repeat the situation of 2017: first, the duties would be canceled, and then the price of gasoline would be raised.

The question arises: why, when they planned to stop repairing the Baku oil refinery producing AI-92 in October, didn"t they make sure that the production of this fuel began immediately in another enterprise? Why is such an important product produced in only one plant? And why is there no understudy or competitor in Azerbaijan?

The issues are topical especially since in May 2015, David Mammadov, Vice-President of the State Oil Company of Azerbaijan (SOCAR) for processing, told reporters that in order to meet the growing demand for gasoline, a strategically important decision was made to reconstruct and modernize refining capacities, in particular, Baku Refinery named after Heydar Aliyev. According to the developed program, in 2018, upon completion of all the works, the plant will start producing gasoline grades AI-92 and AI-95, corresponding to the highest European standards," said D. Mammadov.

Until the end of 2018, there are 70 days left. Will SOCAR be able to fulfill the promise of one of its leaders?

IA Turan addressed a question to a pensioner who worked in the oil industry. The expert who wished to remain anonymous said the government had to implement its own project on the construction of a $ 12-billion oil refinery in Alat. But after the opposition pointed out that a similar plant was being built in Vietnam for only $ 2 billion, the government changed the decision and authorized the construction of a similar plant in Izmir - a $ 6.3-billion Star refinery. The government's decision on the purchase of imported gasoline coincided with the opening of the Star refinery, which may indicate that Baku decided to support the first months of operation of its new enterprise with orders.

Reference: The Cabinet of Ministers decided to amend the "Commodity Nomenclature of Foreign Economic Activity of the Republic of Azerbaijan, import customs duty rates and export customs duty rates". Gasoline AI-92 imported into the country is temporarily exempted from customs duty. Previously, the customs duty for this brand of gasoline was 15%. Another decision of the Cabinet of Ministers reduced the excise rate on the brand AI-92 from 200 to 1 manat. Both decisions entered into force on October 1 and are valid for 90 days. The decision is connected with the temporary cessation of work at the Heydar Aliyev refinery in connection with the planned prevention. Therefore, certain amounts of gasoline will be imported from abroad.

For an idea of ​​the dynamics of growth in the price of auto fuel in Azerbaijan, we will report that in 2013, AI-95 cost 80 gapik / liter, AI-92 and AI-80 cost 70 gapik / liter, and diesel fuel cost 60 gapik / liter.