BAKU, Azerbaijan, March 1. The Azerbaijani government attempts to curb possible growth of fuel prices in the country by reducing excise rates on gasoline with octane number less than 95 and excise rates on gas oil, Doctor of Economic Sciences Professor Elshad Mammadov told Trend, commenting on the amendments introduced by the Cabinet of Ministers to the "Excise rates on excisable goods imported into the territory of the Republic of Azerbaijan" document.
The excise tax rate on gasoline with octane number less than 95 is reduced from 200 manat to 1 manat (from $118 to $0.6) per ton until December 31, 2024, and the excise tax rate on gas oil, including diesel fuel, is reduced from 80 manat to 1 manat (from $47 to $0.6) per ton.
"Dependency on imports persists for various types of oil products. Undoubtedly, the government is making efforts to safeguard economic stability and predictability by curbing price escalation, given that fuel prices significantly influence various cost components and act as a stimulating factor for an inflationary surge," Mammadov believes.
In his view, the Cabinet of Ministers' decision is anticipated to use fiscal measures to counterbalance the potential adverse effects of Azerbaijan importing certain quantities of oil products, particularly as the ongoing modernization of the Heydar Aliyev Oil Refinery is not yet finalized.
"In the event of price fluctuations in the countries from which Azerbaijan procures certain oil products, there is a risk of importing inflation into Azerbaijan. In such a scenario, adjustments to prices within Azerbaijan can be made through modifications to excise duties," Mammadov added.
The modernization project of the Heydar Aliyev Oil Refinery in Baku is planned to be fully completed in 2027.
Following the completion of the modernization, the refinery is expected to yield an annual production of 2 million tons of motor gasoline, 2.9 million tons of diesel fuel, and 1 million tons of jet fuel.
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