A country with strong economy is capable of everything! Heydar Aliyev

Tariff (price) Council of

Azerbaijan Republic

AZ|EN

New tariffs serve to qualitative and reliable gas supply of consumers

03.07.2009

Tariffs of several services were reconsidered at the last meeting of Tariff (price) Council. Resolutions passed on this issue, especially changes made in the natural gas price were considered purposeful and right measure, as well as characterized as part of durable economic reforms by the economics experts. But, wrong notion is made in social opinion and preconceived, reasonless information is spread about this resolution. Certain radical political groups give malevolent explanation about this decision by avoiding the context.

Our interlocutor, the minister of economic development, head of Tariff (price) Council Shahin MUSTAFAYEV responded our questions on factors necessitating the last price reform and its real consequences.

- Mr. Shahin, please give us information on issues discussed at the last meeting of Tariff (price) Council.
No matter in-depth information was given to the community, several aspects need to be explained. Some resolutions were passed at the meeting of Tariff (price) Council held on June 30. Resolutions passed by Tariff (price) Council formerly on service tariffs rendered by the State Service for Registration of Real Estate of the Republic of Azerbaijan and Real Estate Cadastre and Technical Inventory-Making Center of the Republic of Azerbaijan subordinated to the State Committee on Property Issues is considered to lose its force according to the Law of the Republic of Azerbaijan on “Adding appendix and changes to the Law of the Republic of Azerbaijan “On state customs” pursuant to the passed resolution. Furthermore, several paragraphs and articles of resolutions passed on tariffs of services rendered in the spheres of the State Committee of Land and Cartography, standardization, metrology, State Maritime Administration, State Veterinary Service and State Fitosanitary Service under the Ministry of Agriculture, spreading and arranging street advertisements, as well as services rendered to legal and physical entities by Main Traffic Police Department of the Ministry of Internal Affairs and state registration of medicinal preparations by entities of the Ministry of Health were considered to lost its force. Several appendix and changes were added to the resolutions passed formerly on tariffs of services financed by the possessors of the objects that veterinary control is necessary to conduct by State Veterinary Service under the Ministry of Agriculture and service tariffs on state registration of medicinal preparations by entities of the Ministry of Health.
According to the resolution of the Council, monthly fees of Special State Protection Service for “AzStateNet” State Internet and special communication services was dropped 44,4 - 66,0% depending on channel capability. Increasing volume of internet traffic recently entering the republic and low fees for connection of internet paved the way for this resolution.
- Community is interested mainly in the changes made with natural gas price. What did necessitate this resolution?

- Much to my regret, recently confusion is created in the community by wrong and preconceived information on this issue. These efforts serve for low political interests. Certain groups, envying sustainable social-economic development tendency of Azerbaijan supposedly protect interests of people.

Only honorable President Ilham Aliyev and government ruled by him maintains people’ interests and expresses population’ benefits. Our country is in the leading position for social-economic development dynamics due to the purposeful economic reforms implemented by the head of the state. Simultaneously, our republic is in the leading position in the world due to the effectiveness of implemented reforms. Expert opinions on successful results of economic reforms and monitorings conducted by the international economic-financial organizations again prove that, socio-economic development strategy implemented under the leadership of Mr. Ilham Aliyev is totally right, based on the reality and consequently ensures comprehensive prosperity of Azerbaijan. Continuation of these great economic achievements gained by our country even during global economic crisis is really the result of the considered policy of honorable President Ilham Aliyev. Today Azerbaijan economy endures economic crisis more steadfastly. Growth tempos of various fields of economy, as well growth tendency of Gross domestic product, people’ income continues. Simultaneously, AZN is considered the most stable and sustainable national currency in the territory of CIS countries now. I don’t consider necessary to note statistic information on achievements of economic policy in-depth. Because, even without these figures our citizens observe development inclination in their daily lives quite clearly. As well, our people see bad consequences of economic and financial crisis, misery, hunger, unemployment observed in other countries. They understand that the reason of our country not to encounter these problems is fruit of the government run by Mr. Ilham Aliyev.
We shouldn’t forget that, ensuring socio-economic development under market principles demands co-ordination between economic interests of manufacturers and social interests of consumers.
Our country to be the leader among world countries for growth tempos of gross domestic product, strong position of our country in regional and whole world economy, improvement of social welfare of population significantly is exactly logical result of economic policy pursued on this direction. Improvement of quality of services rendered to the population, along with ensuring profitability of communal enterprises are necessary for sustainability of gained achievements. Investigations were held to determine optimal price of gas as the continuation of this process. Several objective reasons necessitating regulation of gas price were considered as the result of these analyses. It means that, maintaining profitability of gas sector is necessary to pay totally for bought natural gas, to execute necessary investments, to implement obligations on the budget, to improve social protection of employees working in gas sector.
Price was law, it was impossible to clear charges for gas sale. Stock company couldn’t operate profitably. These problems necessitated more objective approach.
So, proposals were discussed to solve existing problems, and price of 1000m3 natural gas was fixed to AZN 100 for population consumer group taking into account influence of tariff changes to the solution of above-mentioned issues.

- How different is gas price and natural gas consumption of every subscriber in comparison with other countries?

- Natural gas consumption in our country increase year by year recent years. General gas consumption increased by 10,5% in 2008 compared to 2007, consumption of population consumer group increased by 20%. Consumption volume of several subscribers increased by 13,4% over relevant period. Now need for energy resources increase in the world and therefore energy resources are used economically. In such situation, gas is squandered, and instruments not meeting standards are used. Natural gas consumption in Turkey, Slovakia, Hungary, Kyrgyzstan, Georgia and in other European countries is 2,0-2,9 times more than Azerbaijan.
At the same time, we shouldn’t forget that, natural gas price in Azerbaijan is 3-11,7 times less than in Turkey, Kazakhstan, Ukraine, Latvia, Georgia, Moldova and other European countries. Due to the use of the instruments not meeting standards, much natural gas is squandered. As well vast use of these instruments creates some serious security problems for people.

- How will new tariff of natural gas influence people, especially its poor group? 

- First of it is worth to note that, expenses of refugees and compelled migrants’ gas consumption is paid by the state within the framework of determined limits. Therefore new tariffs won’t influence this group of population.
About poor group of population, I want to note that measures are undertaken to increase level of need criterion (extra AZN 5) to appoint targeted social aid to poor group.  This increase will be applied from July of current year.
Pursuant to the accounts, natural gas consumption expenses considered in consumption basket per capita will increase monthly AZN 1,1, and AZN 5,2 for every subscriber. So as I noted, increased volume of need criteria per capita is AZN 5, AZN 23,5 per every subscriber. As you see, extra allocations of state to help to poor families is 4,5 times more than payments that will be paid by new tariffs. We shouldn’t forget that, people’ income has increased by 19% since the beginning of the year in the republic. As well average wage grew by more than 22%.
Although average wage is approximately AZN 300 in the republic, this indicator is much lower for the employees working in gas sector now. Therefore new tariffs will pave the way for improvement of social situation of the employees operating in gas sector.  

How will the tariff changes impact the development of gas sector?

- Financial opportunities of gas sector will increase due to the tariff changes.  This factor will create an opportunity to renew infrastructures of transportation, distributive network and storing, to reconstruct systems of measure, report and accounting on the basis of modern technologies, to improve reliability of maintenance, to minimize loses, to enhance further qualitative and reliable gas supply of population. Finally, new tariffs serve for qualitative and reliable gas supply of population.  
   
Interviewed:                                                                   Ikhtiyar HUSEYNLI
“Azerbaijan”
www.azerbaijan-news.az
http://www.azerbaijan-news.az/index.php?Lng=aze&year=2009&Pid=5185

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