SOCAR: Change in gasoline prices to accelerate modernization of oil refining industry

SOCAR: Change in gasoline prices to accelerate modernization of oil refining industry

Baku, Azerbaijan, July 16

By Maksim Tsurkov – Trend:

The change in AI-92 gasoline prices will support Azerbaijan’s state oil company SOCAR in accelerating the modernization of the oil refining industry, SOCAR Vice President for Refining David Mammadov told AzTV channel.

“As a result, the domestic demand for oil products in Azerbaijan will be fully met by 2040,” he said.

Mammadov said that earlier, the price on oil products, in particular, gasoline and diesel fuel, increased in the country in December 2013.

"If we compare that price in dollar terms with today's price, we will see that the price was very low until July 14,” he said. “SOCAR is currently implementing large-scale projects. In particular, modernization and reconstruction work is underway in the oil refining industry. Of course, funds are required.”

“SOCAR is state-owned company and therefore, we expect these funds from the state,” he said. “Taking into account that our estimates of revenues and expenditures are approved by the government every year, it envisages certain investment projects including the extractive, exploration, drilling and processing industries.”

“As the funds are required for all these projects, we proposed to increase gasoline prices, as the company's internal capabilities are limited,” Mammadov said. “Taking into account that currently around 72 percent of the country’s oil products are sold on the domestic market and revenues obtained from the sale in manat and dollar terms sharply dropped, we have certain difficulties in the modernization of the oil refining industry."

“In general, the modernization of the industry will be accelerated, the quality of gasoline will be improved, the company's investment opportunities will be increased through increasing profit, the work will be systemized and this project will be implemented in a short time as a result of the increase in gasoline prices,” he said.

Mammadov also added that the gasoline price is always lower in the countries having oil refining industry compared to others.

"Belarus, Russia, Azerbaijan, Kazakhstan can be cited as example,” he said. “If we imported AI-92 gasoline today, according to our calculations, it would cost 1.05-1.08 manat on the condition that the government would exempt its imports from various customs duties, namely, excises, customs duties, etc.”

“Azerbaijan imports Premium gasoline and its free price, as it is known, is quite high in the market,” he said. “As a result of the oil refining development, AI-92 gasoline mainly used by the population will be as cheap as possible."

The Azerbaijani Tariff (Price) Council decided to increase the retail price on AI-92 gasoline by 0.20 manat July 15.

According to the council’s decision, AI-92 gasoline costs 0.90 manat since July 15.

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