Fuel prices rise in Azerbaijan
Fuel prices rise in Azerbaijan
The price of AI-95 premium gasoline in Azerbaijan rose by 25 percent. The price of AI-98 super-gasoline also went up, but the price of the latter increased by 15 percent. According to experts, the increase in the price of expensive brands of gasoline will not affect the prices of vital products. But today it became known that the cost of lamb increased by about 20 percent.
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What happened?
On the night of July 13, 2022, the price of AI-95 premium gasoline in Azerbaijan rose by 25% to 2 manats [approximately $1.18]. At the same time, AI-98 super-gasoline increased in price by 15 percent. A liter of this gasoline is already being sold for 2 manats 30 gepiks [approximately $1.35].
According to experts, more than 90 percent of car owners in Azerbaijan use AI-92 gasoline, a liter of which, as before, costs 1 manat [approximately $0.59]. For this reason, rising prices for expensive brands of gasoline should not affect the cost of vital products.
The price of lamb has also increased
However, today, the media reported a rise in the price of lamb by about 20 percent. Now a kilo of lamb costs 15 manats [$8.82].
In the Azerbaijani segment of social media, users began to joke about the rise in the price of lamb immediately after the rise in prices for expensive brands of gasoline.
“Do they transport sheep to the markets in expensive foreign cars?”
“No, this is a butcher driving an expensive foreign car”
No rise in prices for other products and goods has been noticed today.
The reason for the increase in the price of gasoline
The increase in the price of “premium” gasoline in Azerbaijan is explained by the fact that it is not produced in the country, and its price depends on the price of oil on the world market.
A few days before the rise in gasoline prices, TV channels and online publications close to the government aired stories and published articles on the importance of regulating fuel prices based on the global market conditions.
According to economists, the direct reason for the rise in prices for premium brands of gasoline is the monopoly of the state represented by SOCAR in the country’s fuel market. No other company imports fuel to Azerbaijan, and the state oil company dictates its terms.
Expert comment
According to economist Rashad Hasanov, in fact, in the last two weeks in the world market, there has been a decline in oil prices. Thus, the oil began to rise in price in February amid the Russian-Ukrainian war.
“In May, prices reached their peak. A barrel of Brent oil traded at $135. Now, amid the recession risks and conservative government policies, reaching agreements with non-OPEC countries, as well as changes in supply and demand in the market, Iran’s oil supply to China at dumping prices, prices begun to decline. Today the price has dropped to $100 per barrel. All this indicates a price correction in the market. Therefore, I consider this explanation incorrect”, Hasanov said.
The expert stressed that the prices for AI-95 and AI-98 gasoline should be formed by the market:
“The agitation campaign recently carried out in the media in support of the increase in prices for these types of fuel cannot but arouse bewilderment.”
According to the economist, citizens are being misled:
“Comparison of fuel prices in our country and in other countries should be carried out on the basis of some methodology – either on the basis of the share of fuel in the structure of the family budget, or in comparison with family income. Otherwise, comparison of gasoline prices in Azerbaijan and the US becomes absurd. The average income in the US today is $2,500, and in Azerbaijan it is $400-500. And in the regions of the country, incomes are even lower – they amount to about $ 200. Therefore, a comparison with the United States is inappropriate”.
Also, according to Hasanov, it is inappropriate to compare gasoline prices in Azerbaijan with countries with high energy dependence.
“The state itself is well aware that it is playing a dishonest game since there is only one fuel supplier on the market. And if so, then prices cannot be formed on a market basis. This is clear to everyone”, the expert said in an interview with Turan.
According to him, today gasoline in neighboring Georgia and Turkey is still more expensive than in Azerbaijan. But these countries are not oil producers:
“It is impossible to draw an analogy between countries for one type of product. Yes, gasoline is more expensive in Georgia than here. But a car that is sold in Georgia for 5,000 dollars is sold here for 12-13 thousand dollars. And as a result, the proportion of transport costs in a Georgian family is either lower or equal to the same indicator in an Azerbaijani family. You can’t mislead people.”
