BAKU, Azerbaijan, June 30
Trend:
A meeting of the Azerbaijani Tariff Council was held on June 30, Trend reports with reference to the council.
The appeal of the State Oil Company of Azerbaijan (SOCAR) was considered at the meeting and a corresponding decision was made on the regulation of tariffs for natural gas.
According to the decision, 1,200 cubic meters per year will be calculated at the current tariff – 0.10 qepik (5 cents) per cubic meter, from 1,200 to 2,500 cubic meters per year - at the rate of 0.20 qepik (11 cents) per cubic meter, over 2,500 per year - 0.25 qepik (15 cents) per cubic meter.
This decision will not affect the cost of electricity
The reason for reconsidering the gas tariff is an increase in consumption, an expansion of gas supply coverage and an increase in costs as a result of an increase in the number of subscribers by almost 18 percent.
Low gas tariff for the population and an increase in consumption from about 1,300 cubic meters to 1,600 cubic meters for each subscriber compared to 2017, when the recent tariff regulation came into force, as well as an increase in total consumption from 2.7 billion cubic meters to 3.7 billion cubic meters increased the loss in gas supply, which is paid off at the expense of the state budget.
An increase in tariffs is required to improve the quality of service, eliminate dependence on the state budget, ensure investment, completely repay the production costs and constantly supply consumers with natural gas.
The various options for increasing the tariff were considered during the discussions held at the meeting of the Tariff Council.
The proposed models were evaluated taking into account such issues as ensuring the sustainability of energy security in accordance with the economic policy of the country, purposeful and rational use of resources, compliance with the interests of consumers and producers, social orientation, gradual formation of market relations in the field of gas supply, elimination of subsidies from the state budget, prices for natural resources in other countries, etc.
The preference was given to a model that meets the interests of the low-income layers of the population upon unanimous decision of the members of the Council.
So, using the optimal approach in tariff regulation for about 51 percent (five million people) of subscribers whose gas consumption is up to 1,200 cubic meters (including 1,200 cubic meters) per year, the tariff remained at the same level – 0.10 qepik (0.05 cents) per cubic meter.
The tariff has been set at 0.20 qepik (0.11 cents) per cubic meter for the volume of consumed gas from 1,200 to 2,500 cubic meters (including 2,500 cubic meters) and more than 2,500 cubic meters – 0.25 qepik (0.14 cents).
The adopted model of tariff growth envisages the preservation of the preferential tariff system for a number of spheres.
The tariff for natural gas which is supplied to the industrial and agricultural areas has not been changed and is kept at the level of 0.20 qepik (0.11 cents).
Moreover, to prevent an increase in the price of electricity, the tariff for natural gas which is supplied to the power plants was increased by only 0.1 qepik (0.005 cents) - from 0.12 qepik (0.07 cents) to 0.13 qepik (0.08 cents).
To optimize the costs of using the heating system by the citizens of the country, as well as to ensure the sustainability of the heat supply system operating on natural gas, the natural gas tariff for Azeristiliktechizat OJSC, an Azerbaijani heating supply operator, and boiler houses of residential buildings has been reduced from 0.20 qepik (0.11 cents) to 0.13 qepik (0.08 cents).
At the same time, to stimulate the transition to environmentally friendly fuel and reduce the cost of public transport using compressed gas, the tariff for gas which is supplied to the gas filling stations selling compressed gas has been reduced from 0.20 qepik (0.11 cents) to 0.13 qepik (0.08 cents).
The tariffs were increased by five qepik ($0.03 cents) in other spheres (trade, services, etc.).
The decision will come into force on July 1, 2021.
The economic restrictions created by the COVID-19 pandemic, as well as the drop in production volumes of certain consumer goods in the countries, have an impact on the world economy and international markets.
Over the past year, the prices for all main food products in world markets have been constantly growing. The rise in prices in the world energy markets accelerates this process. In particular, there is an increase in the world market prices for gas.
As a result, gas tariffs have changed in many countries. The utility costs for consumer categories increased.
One cubic meter of gas for the population in Ankara cost about 0.32 qepik (0.18 cents), in Kiev - 32.6 qepik (0.19 cents) in 2020. Now 1 cubic meter of gas is sold for 0.32-0.40 qepik (0.18-0.23 cents) in Ankara while in Kiev - for 0.54 qepik (0.31 cents).
The new tariffs in Azerbaijan are lower in comparison with the tariffs of some countries. Thus, 1 cubic meter of gas for the population costs 19.7–29.5 qepik (0.11-0.17 cents) in Georgia, 9.2–34.2 qepik (0.5-0.20 cents) in Belarus, 11.9–16.5 qepik (0.7-0.9 cents) in Russia.
Currently, 1 cubic meter of gas for subscribers not belonging to the "Population" group in Turkey varies on average within 35–49 qepik (0.20-0.28 cents), in Ukraine - 22–26 qepik (0.12-0.15 cents), Belarus - 21.9–78.2 qepik (0.12-0.45 cents), in Russia - 15.3-18.2 qepik (0.8-0.10 cents).
As a result of the tariff change, the dependence on the state budget of economic entities engaged in gas production and gas supply will gradually decrease. The free budget funds will be directed to social measures. The control measures will be taken to avoid abuse of tariff regulation.
The prices for 247 medicines registered by the state were also approved at the meeting of the Tariff Council.
Until now, the "Medicines" section on the website of the Tariff Council includes a full list of 12,689 medicines for which wholesale and retail prices and effective dates have been approved, taking into account their trade name, pharmaceutical form, name of the active substance, dose, trade packaging, packing volume and country of origin.
The decision can be found in the "Council Decisions" section on the Tariff Council website.