New Azerbaijani Tariff Council Decision to Improve Efficiency of Housing and Municipal Services

BAKOU, Azerbaijan, July 1

Trend:

The new decision of the Azerbaijani Tariff Council aims to increase efficiency in the housing and utilities sector, analyst from the Center for Analysis of Economic Reforms and Communication Aykhan Satiji said, Trend reported on July 1.

“Wholesale and retail prices for natural gas in the country have changed in line with the Tariff Board’s June 30, 2021 decision,” Satiji said.

“The changes were made in accordance with the country’s economic policy, based on key factors such as sustainability of energy security, targeted and efficient use of resources, coordination of consumer and producer interests, profitability economic, social orientation, gradual formation of market relations in the supply of gas to the field and elimination of subsidies from the state budget, ”said the analyst.

“The most important point here is that the changes have not affected the price of natural gas in a volume of up to 1,200 cubic meters per year for some consumers and that the price has been kept at the level of 0.10 qepik (0.05 cent) per cubic meter., which covers 51% of the population, or five million people, ”Satiji said.

“At the same time, the price per cubic meter of natural gas is set at 0.20 qepik (0.11 centime) for part of the gas consumed with a volume of up to 1,200-2,500 cubic meters and at 0.25 qepik (0.14 cents) for part of the gas with a volume of more than 2,500 cubic meters, ”said an analyst.

“This is a vivid example of the social nature of ruling and of protecting the interests of the majority of the population,” the analyst said. “The gas tariff for the agricultural and industrial sectors has remained unchanged – at the level of 0.20 qepik (0.11 cents) per cubic meter to restore the economy.”

“One of the nuances is that the rise in energy prices in world markets was the increase in energy consumption and inefficient use,” Satiji said.

“That is why, to ensure the sustainability of the natural gas heating system, as well as to optimize the costs of using the heating system by the citizens of the country, the tariff of natural gas for Azeristiliktechizat OJSC, a supply operator Azerbaijani heating, and boiler rooms in residential buildings has been reduced from 0.20 qepik (0.11 cents) to 0.13 qepik (0.08 cents), ”said an analyst.

“Analysis of global trends shows that central heating systems are a priority in terms of energy efficiency,” Satiji said. “In addition, a reduction in tariffs for these purposes will have a positive impact on environmental protection. England can be cited as an example. According to statistics for 2020, 95 percent of the population there uses the central heating system while 86 percent of central heating systems use natural gas. “

The analyst pointed out that by comparing the prices of natural gas sold to the population in Azerbaijan with other CIS and neighboring countries, it can be seen that gas is cheap even for a part of the population who consumes more than 1,200 cubic meters per year. .

“So the price per cubic meter of natural gas per capita was 0.32 qepik (0.18 cent) in Ankara and 32.6 qepik (0.19 cent) in Kiev in 2020,” Satiji said.

“Currently, those numbers have increased to 0.32-0.40 qepik (0.18-0.23 cents) in Ankara and 0.54 qepik (0.31 cents) in Kiev,” Satiji said. “In addition, these numbers range from 19.7 qepik to 29.5 qepik (0.11-0.17 cents) in Georgia, from 9.2 qepik to 34.2 qepik (0.5-0.20 cents) in Belarus and from 11.9 qepik to 16.5 qepik (0.7-0.9 cents) in Russia. “

“If we consider the prices in EU countries, the figures vary from 0.29 qepik (0.17 cent) to 0.68 qepik (0.4 cent) per cubic meter of natural gas in Latvia, Lithuania, Hungary and Romania, ”said an analyst.

“Electricity tariffs for information centers that consume electricity through 110 kV transmission lines, have a stable load during the day and use at least five million kWh of electricity per day at production purposes, were differentiated between day and night on another Tariff Board decision, ”Satiji said.

Thus, the price is set at 7.3 qepik (4.3 cents) during the day (from 8 a.m. to 10 p.m. (GMT + 4) while (from 10 p.m. to 8 a.m. (GMT + 4) – at the level of 3.5 qepik ( 2.05 cents) at night.

“Thus, price differentiation according to the time of day regulates the daily charging schedule, as well as creates incentives to use low-cost electricity, reduces charging during peak hours and reduces the need for electricity. ‘invest in additional volume of power generation, ”Help Analyst.

“No changes have been made to the electricity tariffs for the population and subscribers carrying out an activity different from that mentioned above, which also shows the efficiency and the social nature of the decision,” added Satiji .