Gov't to fight with artificial price rise
By Nigar Orujova
On the eve of the New Year, people in Azerbaijan have faced with unpleasant anxiety about the rise of prices because of the second devaluation of the national currency for a year.
Artificial increase of prices ahead of holidays is a common practice in the country, but this time some shops raised the prices to compensate the sum the national currency lost after switching to the free-floating exchange rate.
The manat that lost 34 percent of its price in February, but now it depreciated by 48 percent. The official exchange rate of US dollar and euro to Azerbaijani manat was set at 1.5523 manats and 1.6978 manats, respectively on December 23.
This in fact served as a source of anxiety for the population, pushing them to shops and markets for reservation of goods.
Azerbaijan imports the bulk products which are bought at US dollar, which means that prices will definitely rise. In this situation the government assures to prevent price hike for food products.
Devalued manat may have different effects on the value of goods in Azerbaijan, head of the State Service for Antimonopoly Policy and Consumer Protection Zahid Isayev said in an interview with state television AzTV on December 22.
This will depend on the special weight of the part of net price, which is formed depending on import factor, in the final prime cost of a product, he said.
“The import factor has a strong affect on formation of prices in the domestic market. Increase of prices for this portion of products in the manat equivalent may lead to price hike for goods. Import goods hold large specific weight on the Azerbaijani market, and their prices can be ultimately higher.
“As for local products, this special weight [import factor] in their direct price is negligible and their prices will increase lower than those for import products. It may in turn boost their competitiveness and sales on the market,” he believes.
The volume of domestic production in Azerbaijan has increased several times over the past few years, and the country has made progress in providing its food security.
As of early 2015 the country is self-sufficient in meat by 92.4 percent, eggs by 99.7 percent, milk and dairy products by 76.3 percent, grain by 60.6 percent, potatoes by 89.7 percent , melons by 100.4 percent, fruits by 120 percent, sugar by 170 percent, and vegetable oil by 72 percent.
Isayev thinks that anyway no country can fully restrict import of products.
“Today, most home appliances, automobiles and light industry products are imported into the country. In addition, many components are imported into the country for a number of food products manufactured in Azerbaijan,” he said.
Consumers have already noted the increase in prices of household appliances, while some centers for car sale said the increase in prices would begin from 2016.
Meanwhile, bread and tobacco products were sold at an increased price in some markets, while medicines prices are also expected to go up.
He said that today the main task is to prevent the artificial increase in prices.
“We have strengthened the control over artificial price rise, artificial shortage and other violations. We are studying each case of overpricing, and the validity of overpricing, and will take appropriate actions should we detect any break,” said Isayev.
He urged consumers to actively appeal to the service on the facts of artificial increase in prices.
The increase in cost also touched prices for tickets to international destinations in both railroad and air traffic.