The CESD Exclusive Assessment: Causes and Consequences of Rising Utility Prices in Azerbaijan

Abstract

The regular meeting of the Tariff (Price) Council of the Republic of Azerbaijan held on November 28, 2016 re-examined the sale prices of natural gas, electricity, heating oil, jet fuel. According to the appeal made by the State Oil Company to the Tariff (Price) Council, during recent years large-scale investments have been undertaken to ensure the sustainability of natural gas supply and the quality of service has been improved. Additionally, it was stated that, following the agreements on production sharing, some part of natural gas sold in the country is purchased from the operating companies in USD. This results in a loss, since the cost exceeds the regulated prices in the country. In order to ensure sustainability and quality alongside decreasing financial burden, it was proposed by SOCAR to raise the natural gas tariff to 180 manat per 1000m3 for all consumers.