Switch off the light and go to bed

The Tariff Council of Azerbaijan has recently increased the price of electricity from 0.06 AZN to 0.07 AZN per kilowatt ($0.04 US to $0,044 US). There had previously been an increase in water and sewage utility prices from 0.36 AZN to 0.50 AZN per cub. m. Experts believe this decision was linked to a lack of state funds.

Wholesale tariffs on electric power, generated by the state-run monopoly, JSC Azerenergy, have been increased from 0.041 AZN to 0.043 AZN. This is the first increase in these prices since January 2007.

As the Tariff Council pointed out in a statement it made, the tariff increase is aimed at ensuring the ‘stability and durability of high-quality power supply services’, as well as the prospective development of power manufacturers and the distribution network. The new tariffs will reduce power manufacturers’ dependence on the state budget and will raise the salaries of more than 18,000 employees in the system.

As it was said in this statement the subscribers’ debt will be calculated based on old tariff rates until July 15.

Tariffs have been increased amidst a decline in people’s income, fast-growing unemployment, inflation and a two-fold devaluation of the national currency.

Social media responded to this decision with an intrinsic humor.

-Hey, neighbor, the water and electricity have become more expensive. Why?
-For no reason. Just, turn off your water, switch off the lights and go to bed, otherwise you may think become involved in politics and the gas and transport prices will increase, too.

Another dialogue from social media:
-I wonder whether the President pays electricity bills?
-The whole country is paying on his behalf, and not only for the electricity.

“In my opinion, this decision is linked to the present condition of the key operator in the country – “Azerishyg”, says Toghrul Mashalli, an economist. “There are two important factors at work. The company’s revenue growth has slowed down. As he stated, their income in 2014 was 427 million AZN. Whereas in 2015, after Azerbaijan’s entire energy system was re-subordinated, they experienced a 70% growth and their income totaled 756 million AZN. It will be difficult to maintain a similar rate of growth in 2016 and that is why they have decided to increase their income in whatever way possible.

Besides social media discussions, there has not been any open public protest. After two devaluations of the Manat, everyone expected something of the kind.

Published 18.07.2016