TODAY.AZ / Business

SOCAR intends to suspend production of AI-95 gasoline

11 February 2014 [14:23] - TODAY.AZ
The State Oil Company of Azerbaijan Republic (SOCAR) has appealed to the government with a proposal to suspend the production of AI-95 gasoline and fully switch to the production of A-92 gasoline, the head of SOCAR Rovnag Abdullayev told journalist on Feb. 11.

He said the AI-95 gasoline is supposed to be imported while AI-98 gasoline is already being imported into the country from abroad.

Abdullayev said these measures are supposed to meet the growing demand for gasoline in Azerbaijan.

Currently, the capacities of oil refineries in Azerbaijan no longer cope with the growing volume of gasoline consumption in the country. That is why, SOCAR appealed to the government with a proposal to conduct a full transition to the production of AI-92 gasoline. AI-95 and AI-98 gasoline will be imported by companies engaged in retail sales of gasoline in the country.

The SOCAR head said that in the next few years, the company will work to increase the gasoline production capacity at its oil refineries in order to meet the country's needs before 2023-2025, that is, by the time of full commissioning of a new complex for oil and gas processing and production of petrochemicals.

Abdullayev stressed that the SOCAR is also working on bringing the produced fuel to the Euro-4 emissions standards.

Earlier by a decision of the Azerbaijani government, dated January 21, 2013, the imports of gasoline with 95 and 92 octane rating was exempted from customs duty and excise tax until June 2014, which was not due to the gasoline shortages in the country, but because of plans on suspending the catalytic cracking unit at the Heydar Aliyev Baku Oil Refinery.

Duty rate was reduced from 15 percent to zero, and the excise duty rate on imports of these gasoline brands was reduced from $250 to $1 per ton.

The unit's work is planned to be stopped in April for a month for reconstruction and to conduct work on increasing its capacity, which will affect the production of gasoline in the country. This may require a replacement of these volumes.

During the period of suspension of the catalytic cracking unit's work, the imports into the country and distribution of gasoline with an octane rating of 95 and 92 will be provided directly by SOCAR.

Modernization of the unit will make it possible to increase its processing capacity by one million tons (from two tons to three million tons), and gasoline production - by 450,000 tons.

The need to increase the unit's capacity is associated with the rising demand for gasoline in the domestic market.

The oil products are produced at two Baku oil refineries. Both oil refineries belong to SOCAR, which annually processes approximately seven million tons of oil extracted onshore and offshore with its own funds.

The price of oil products in Azerbaijan are fixed and determined by the Tariff Council. The retail price of gasoline increased in Azerbaijan in line with the council's decision, dated December 3, 2013.

The retail price for a liter of AI-95 gasoline is set at 0.8 manats, and the retail price of AI-92 and AI-80 gasoline - at 0.7 manats per liter.

Prior to this, the cost of one liter of AI-95 gasoline was 0.6 manat, AI-92 and AI-80 - 0.55 manat.

The last time fuel prices changed in Azerbaijan was in 2007.

The official exchange rate for Feb. 11 is 0.7843 AZN/USD.


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