Azerbaijan zeroes customs duty on AI-92 petroleum import

Azerbaijan zeroes customs duty on AI-92 petroleum import

Azerbaijan has zeroed the customs duty for the import of gasoline AI-92 for 60 days and fixed excise tax for such import at the formal level.

The Cabinet of Minister made a decision to eliminate customs duty on imported gasoline with an octane rating of 92. The zero rate is also applied for gasoline with octane rating of 98, which the country does not produce, and on other types of gasoline is equal to 15 percent.

The Cabinet explained that it cancelled the customs duty upon the appeal of Azerbaijan’s state energy company SOCAR in connection with the maintenance operations that are currently underway at the Heydar Aliyev Oil Refinery, owned by SOCAR.

The excise rate on the import of benzene (excluding aviation gasoline) has been decreased from 200 manats to one manat ($ 124 – $0.6124) per ton.

The necessity to import AI-92 grade benzene is considered to be temporary, which is mainly connected with the halt of the production at the site since August 1. The operations, which are held in accordance with the schedule, envisage implementation of technical servicing operations, analysis of conditions of equipment, etc.

Chairman of the Center for Economic and Social Development (CESD), Vugar Bayramov said that the price of AI-92 is regulated by the Tariff Council, therefore the market will not be strongly influenced.

“The changes envisage that benefits will be applied only in reference to benzene with octane grade less than 95, which means that the reduction of expenses will be observed only in the import of benzene with low octane grade,” he said.

He added that the Tariff Council may revise the prices and consider their reduction, should the expenditures on the import of AI -92 and similar benzene grades sharply reduce after the changes.

Meanwhile, SOCAR reported that about 4,000 tons of AI-92 grade benzene will be imported to the country in the coming days. The output volume of AI-92 grade of benzene was sufficient before the launch of maintenance operations.

“As of August 16, the average level of benzene consumption stood at 3,900 tons per day and the demand was met by means of reserves. Currently, SOCAR possesses benzene reserves, which will be sufficient for the consumption within 8-10 days. In this regards, the company appealed to the country’s Cabinet of Ministers with the request to cancel customs duties and excise tax to minimize financial losses of the company during maintenance period,” SOCAR reported.

Maintenance operations at Heydar Aliyev Oil Refinery are implemented within the modernization plan, which is expected to be completed by 2020. By that time, producing capacity of the refinery is expected to increase from 6 million up to 7.5 million tons per year.

Some 3.14 million tons of petroleum products were produced in January-July 2016 as compared to the volume of 3.67 million tons in the same period of 2015.

Heydar Aliyev Oil Refinery which is focused on the production of light petroleum products, is processing 21 out of 24 grades of Azerbaijan crude and 15 different petroleum products, including automotive gasoline, aviation kerosene, diesel fuel, black oil, petroleum coke, and others. The plant is meeting the republic’s entire demand for petroleum products completely, while 45% of its petroleum products are exported.

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