TODAY.AZ / Business

IMF "did not demand" oil products price hike

17 January 2006 [13:30] - TODAY.AZ
The recent doubling of the prices on some oil products was not a requirement of the International Monetary Fund, but "just a recommendation to the Azeri government", the IMF representative in Azerbaijan Basil Zavoico has said.

According to Assa-Irada, he reminded that the Fund will not implement any programs in Azerbaijan in 2006, which means the country has no obligations left to the organization.

"The IMF has regularly advised the Azeri government to bring the prices on energy resources to world levels. But at the same time, we recommended that the impact of the increase on poverty be definitely taken into account. However, the last program jointly implemented by IMF and Azerbaijan completed in July 2005, which means the country currently has no obligations. The Azeri government did not raise the diesel price on our demand."

The senior body regulating prices, the Tariff Council, on January 5 set the retail prices on diesel, kerosene and fuel oil at 36 Gapiks per liter, or 1,800 old Manats (some 40 cents).
With regard to earlier concerns over the inflation rate, Zavoico said that according to IMF estimates, it will not exceed single digits, thus hitting the unmanageable mark. He said, however, that much work remains to be done by the Azeri government to contain inflation, although the developments indicate that it will not pose a serious threat for Azerbaijan this year. The IMF representative said the increase in fuel prices will not speed up inflation, as this is not a continuous process.

Zavoico said one of the recommendations laid out by IMF was ensuring the transparency in the energy sector. He said that the prices on energy resources charged by Azerbaijan are far from world levels despite the latest increase. "It is essential to raise the prices in the future again, as oil is an exhaustible resource and should be used more efficiently," he said.


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