How Much Does Azerbaijan Really Earn from Higher Oil Prices?
Development, Center for Economic and Social | April 2018
Fiscal revenues of carbohydrogen rich Azerbaijan is severely dependent on sales of oil, oil products and natural gas. From this point of view the change of oil prices in the global markets is considered as the main indicator for estimating the financial condition of the government. It should be noted that the price of a barrel of oil is estimated to be 45 USD when calculating the state and oil fund budget of the current year. Under these circumstances the net profits of the State Oil Fund of Azerbaijan (SOFAZ) from the sale of carbohydrogens is estimated to be 9,724 billion manats, while tax revenues from the oil sector to the state budget is estimated to total 1,88 billion manats. As a result, the share of oil revenues in the state budget increased compared to last year and reached 55.1%3 (the same indicator was 47.9% in 20174). According to our observations, the current conjuncture in the global oil market is changing in the favor of Azerbaijan. The price of a barrel of BRENT crude oil is changing in the interval of 70-75 USD5. Overall the average price for a barrel of BRENT crude oil was 66.8 USD during January – March of 20186 [Note: Starting from the III quarter of 2017 SOCAR has stopped publishing the monthly average price of Azeri light, which is the only source of information]. In the meantime oil extraction of the country increased by 2.4% and reached 9,7 million tonnes, while gas extraction increased by 5,2% and attained 7,3 billion cubic meters.
CitationDevelopment, Center for Economic and Social. 2018. How Much Does Azerbaijan Really Earn from Higher Oil Prices?. © Center for Economic and Social Development. http://hdl.handle.net/11540/8251.
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