Azerbaijan Grand Prix under threat as oil prices plummet
Azerbaijan’s inaugural Formula 1 race could be in doubt, according to an economist.
The first F1 race on the historic streets of Baku is scheduled for June, but Azerbaijan’s economy is currently being battered by the collapsing price of oil.
“Azerbaijan is an oil country,” Ali Hasanov, a presidential advisor, told the state news agency Azertac. “The prices on oil and oil products have reduced threefold since early 2015. This means that Azerbaijan’s revenues reduced threefold.”
In the first 21 days of 2016, prices have plunged a further 25 per cent — a figure not seen since the global financial crisis.
In the same period, the Azerbaijan currency has lost 30 per cent of its value, with some predicting that the central bank’s reserves will run out within 3 months.
So according to Brazil’s UOL, some Azerbaijani authorities are pressing for the cancellation of the grand prix.
“They have to cut the state budget,” said economist Natig Jafarly, “as it is currently based on the price of a barrel at 50 dollars.”
Currently, the price stands at less than $27 per barrel.
Jafarly added: “The best way to save money at the moment is to cancel the grand prix and the (2017) Islamic Games.”