Retail prices of gas to increase twofold in 2007

Azerbaijan buys gas from Russia at $110 per 1,000 cubic meters, but the price of this gas is likely to grow to $150 or even $230. Gas is mainly imported from Russia to fulfill the needs of Azerbaijan's electric power engineering. The state subsidies for this sector will decrease by $100 million in 2007. A part of the imported gas is supplied to the Northern Azerbaijan population at $55 per 1,000 cubic meters.

The Azerigaz JSC President, Alikhan Melikov said earlier that the gas tariffs could be reconsidered in Jan. 2007.

The authorities also intend to increase the prices of liquefied gas, which is already a shortage at Azerbaijan's gas stations. This fuel is sold at AZN 0.2 ($0.22) per liter, though the price should not have exceeded AZN 0.15 ($0.17). The SOCAR President, Rovnag Abdullayev said the shortage of liquefied gas has resulted from its low sale price.

Earlier Russia has warned Azerbaijan that it will decrease the gas supply to it threefold in 2007. Russia should export 4.5 billion cubic meters to Azerbaijan in 2006. Turan