Baku: SOCAR’s gas production costs have risen significantly, with the actual cost of producing 1,000 cubic meters of gas reaching 80.25 manats last year.

According to Azeri-Press News Agency, this marks an increase of 4.22 manats or 5.5% compared to the previous year’s figures.

The annual report from SOCAR outlines the distribution of expenses incurred in gas production. Material costs made up 2.6% of the total, while fuel and electricity costs accounted for 0.3% and 0.4%, respectively. Wages comprised 13% of the expenses, with social insurance contributions at 3%. Depreciation of fixed assets was at 17%, and repair and maintenance of these assets accounted for 13.4%. Transportation costs were 13.1%, security costs 2.3%, mining tax 16.2%, other taxes 4%, expenses for other services 12.2%, and other miscellaneous expenses 2.4%.

The report further highlights that, when considering not only the production costs but also purchases from ‘Azercontract’ JSC, imports, processing, storage, transportation, and distribution, the actual cost of 1,000 cubic meters of gas sold by SOCAR in 2024 was 176.82 manats. The increase in gas costs is attributed to a reduction in commercial gas production, which fell by 700,738 thousand cubic meters or 13.1% from the previous year.