Azernews.Az

By Amina Nazarli

Energy-rich Azerbaijan exempted the import of fuel oil used by Azerenergy for electricity production of the customs duty.

Corresponding amendments to the "Customs Rates for Export-Import Operations" were adopted by the Cabinet of Ministers of Azerbaijan.

The decision will be valid until January 1, 2018.

This decision was made with the aim of meeting the fuel needs for electricity generation in the country, based on the proposal of SOCAR, agreed with the Ministries of Finance, Economy, Energy and the State Customs Committee.

The validity of the previous exemption expired on January 1, 2017. Import of fuel oil was exempted from customs duties from May 6, 2016.

Along with the import of fuel oil, Azerbaijan also produces it in the country.

Last year the country produced 485,800 tons of fuel oil against 148.100 tons a year earlier, according to the State Statistics Committee. At the same time, fuel oil consumption in 2016 was 887.400 tons (2.2 times a year).

In January-February 2017, Azerbaijan produced 144.900 tons of fuel oil, and this is 37 percent less than the same period of 2016.

Since August 2015 Azerbaijan started partially using black oil as fuel at its thermal power stations. Before that since 2001 Azerbaijan always used natural gas to generate power.

Plans to increase the use of fuel oil in the domestic market have been developed by the Government in 2013. In February, the excise duty on domestic fuel oil was reduced 49 times to relieve pressure on producers of electricity and heat, and thus prevent the increase in prices for electricity, which costs 0.06 manat per kW. And now threefold reduction in the price of fuel oil, which becomes a major fuel for power generation, should make producers of electricity and heat even more cost-effective, as well as distribution companies, who complain about the high prices of manufacturers

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Amina Nazarli is AzerNews’ staff journalist, follow her on Twitter: @amina_nazarli

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