Analysts criticize the hike in gasoline prices

Faraj Guliyev

The price of gasoline has risen unexpectedly in Azerbaijan, a major producer of oil.

On 19 August, the price of a liter of Premium Euro-95 rose 20%, from 1.25 manats ($0.74) to 1.50 manats ($0.88), while the cost of Super Euro-98 rose 6%, from 1.50 manats ($0.88) to 1.60 manats ($0.94) per liter.

MP Faraj Guliyev, chairman of the National Revival Movement party, has criticized the price hike, which comes on the heels of a rise in fares for public transportation. "In fact, a rise in the price of gasoline in an oil-producing country is incomprehensible,” Guliyev said. “A rise in export prices is something one can understand. But a rise in domestic prices at a time when the price of oil is stable is illogical and nothing but picking people's pockets."

Economist Natig Jafarli wrote on his Facebook page that formally the Price Council does not set the price of Premium gasoline and that the price is supposedly regulated by market laws. "In fact, there is no market, there is no law,” the economist wrote. “The Premium types of gas are only imported into the country by SOCAR's subsidiaries and they set the price. That is, there is no competition, there is no other actor in the market - the price is dictated by a monopoly."

Natig Jafarli
Natig Jafarli

Jafarli said that, according to the law, anti-monopoly regulations come into effect when a company controls more than 30% of the market, but such regulations are never invoked in regard to SOCAR, the state oil company.

"In a country that has an oil history of about 150 years, they have not built one normal oil refinery to produce gasoline that would meet European standards,” according to Jafarli. “The English extract the oil and sell it and give the money to the government, which believes that it manages and has built an economy.”

The economist believes that the price of diesel may also be raised.