An analysis of the costs and benefits of increasing Baku’s public transportation tariffs

Abstract

According to a resolution of the Tariff Council of Azerbaijan, starting from August 2018, prices of passenger transportation services were increased by 50% across the board. The increase in prices covers both bus and metro transportation. Note that the share of bus and metro transportation of all transportation services in 2017 was equal to 96.3%, as reported in official figures. Thus, the increase in the tariff of passenger transportation services covers more than 96% of the sector. Although the Tariff Council has tried to justify its resolution with several arguments, continuing public discussions show that the resolution has caused serious dissatisfaction in society. Considering the importance of the topic, this paper discusses the resolution on increasing prices of passenger transportation services in Azerbaijan, analyzing its costs and benefits in the context of the current domestic situation.