Azerbaijan reports an increase in petrol prices

The retail price for AI-92 (regular) petrol has increased in Azerbaijan – the Tariff Council (a body regulating petroleum prices in Azerbaijan) reported late on 14 July.

Starting from 15 July, the retail price for 1 liter of regular petrol, which is used most commonly among motorists, will increase from AZN 0.70 to AZN 0.90 (USD 0.53) – an increase of 28.5%.

The increase in petrol prices is due to a restriction in SOCAR’s (The State Oil Company of Azerbaijan Republic) export opportunities as well as a drop in the country’s currency receipts. “The prices of AI-92 petrol have been increased so as to bring the quality of home-produced petrol close to that of European standards, to improve the environment, to expand investment opportunities in order to meet the fast-growing demand for petroleum in the country, to ensure modernization of the oil processing industry, as well as due to devaluation of the Manat and restriction of SOCAR’s export opportunities,” the Tariff Council’s website reads.

The Tariff Council also noted that despite the increase in petrol prices, the prices are still lower than in most of the CIS and regional countries:

“The retail price for one liter of AI-92 petroleum in Georgia is USD 0.86; in Russia – USD 0.61; Kazakhstan – USD 0.43; Belarus – USD 0.59; Ukraine – USD 0.98.”

Gubad Ibadoglu, a holder of a PhD in economics, believes that a price hike won’t be limited to just AI-92 petroleum, and that the prices for other petroleum standards and diesel fuel are also expected to increase soon.

“The cost of passenger transportation both for private taxis and public transport are also expected to increase in the near future. The increase in petroleum prices will also lead to a increase in the prices of consumer goods, as transportation costs will also increase. There will be a growth in the inflation rate in HY2, 2017,” Ibadoglu wrote on his Facebook page.

On a side note, according to official data, the inflation rate in Azerbaijan was approximately 1% in HY1 2017.

Toghrul Veliev, an economist, points to certain inconsistencies between the stated reasons and the official figures: “The restriction of SOCAR’s export opportunities has been named as one of the reasons for the price increase. Azerbaijan exported 4 500 tons of petroleum in 2016, whereas exports of the same petroleum in the first 3 months of 2017 was 5 500 tons.”

Social media users mostly made some ironic comments in this regard.

– “Now we will be walking more. So, thank you, government, for taking care of our health.”

– “They could have chosen some other date for announcing this decision, couldn’t they? 14 July is the day Heydar Aliyev came into power. It’s a provocation!’

– ‘We’ll grumble for a couple of days and then will get used to it. It’s not the first time, is it?’

The prices of foodstuffs in Baku shops haven’t changed so far. According to a local grocery owner, if there was an increase in the price of diesel fuel, the prices of foodstuffs would also have increased, as most of the vans that deliver goods to shops use this kind of fuel.