AZERBAIJAN: Law No. 590-IG of 1998 on Natural Monopolies (2015 Ed.)

Meta Data
Title in national language: 
"Təbii inhisarlar haqqında" Azərbaycan Respublikasının Qanunu / Закон Азербайджанской Республики "О естественных монополиях"
Draft: 
No
Revision of previous policy?: 
No
Draft Year: 
1998
Effective Start Year: 
2015
Scope: 
National
Document Type: 
Law
Economic Sector: 
Multi-Sector
Energy Types: 
Oil, Power, Gas
Issued by: 
Office of the President of the Republic of Azerbaijan
Source: 
Policy Database of CIS Countries (RU)
Database of CIS Legislation (EN)
E-Qanun (AZ)
File: 
Law No. 590-IG of 1998 on Natural Monopolies (RU)
Law No. 590-IG of 1998 on Natural Monopolies (EN)
Overall Summary: 
In line with a series of policies pursued in Azerbaijan to accelerate the diversification of national economy and boost productivity, the Law on Natural Monopolies provides a comprehensive set of market regulation measures aimed at restructuring and rebalancing the natural monopolies sector. The present policy document focuses on the national imperfectly competitive – more specifically, energy – markets. While addressing price determination issues, the policy seeks to ensure the balance of interests of all monopoly market actors. The policy establishes regulatory frameworks for the transportation of crude oil via pipelines; transportation of natural gas via pipelines, storage and distribution of the natural gas; transmission and distribution of electric and thermal power; services of the natural monopoly entities in the transport sector, heat supply. Particular focus is made on regulatory instruments including tariff setting for monopoly market commodities, output regulation, etc.
Pricing
Energy pricing: 
Art. 2.1 stipulates that pricing is a key element of monopoly market regulation. Far-reaching and multifaceted benefits envisaged by the Law include market predictability and ensuring relevant stability. In addition to price setting, the regulatory approach is based on determination of monopoly output. --- Art. 11.1.4 allows for the imposition of penalties in case of non-compliance with tariff regulation.
Governance
National policy structure: 
The Law of the Republic of Azerbaijan on Natural Monopolies complies with the provisions of the Constitution, the Anti-monopoly Law and other relevant legislative acts.
Energy institutional structures: 
The policy places an emphasis on the role of the national monopoly control authority – the State Agency for Antimonopoly Policy and Consumer Protection. (Art. 6, 7 and 8). --- The core principles behind the natural monopoly legislation of Azerbaijan include ensuring transparency and achieving greater productive efficiency due to large economy of scale. The policy sets out the regulatory principles for imperfectly competitive markets of Azerbaijan – the principles applied by the national monopoly market authority should higher quality of goods or services be ensured with the introduction of monopolistic structures. The policy emphasizes that measures implemented by the national regulator aim to contribute to economic development and social welfare.