Recently, the Cabinet of Ministers of the Republic of Azerbaijan approved the "Rule for calculating and paying subsidies for the provision of distance-based road transport services by carriers performing regular passenger transport by road." According to the Rules, the portion of carriers' expenses that is not covered by funds generated from passenger fares will be subsidized by the state. It is noted that the new rules will further improve public transport services, as well as stimulate the activities of carrier companies.

Commenting on the issue, Agil Asadov, Department Head at the Center for Analysis of Economic Reforms and Communication (CAERC), stated that the new rules determine the payment of subsidies to carriers performing regular passenger transport by road within the administrative territories of the cities of Baku, Sumgait, Ganja, Nakhchivan, Khankendi, and the districts of Absheron, Aghdam, Shusha, and Lachin. According to the Rules, the value will be calculated based on the provision of distance-based road transport service, and the gap arising between this value and the funds collected from passenger payments will be eliminated through subsidy payments. In other words, when a carrier company's transportation costs are not covered by passenger fares, the resulting difference will be met through the funds of the "Public Transport" Targeted Budget Fund under the state budget. The "Public Transport" Targeted Budget Fund was established by the Decree of the head of state dated September 19, 2025. The adopted new rules will also ensure the transparent and efficient use of this fund's resources.

According to the Department Head, the document approved by the Cabinet of Ministers sets out the rules and methodology for conducting all relevant calculations for the purpose of subsidy transparency. The calculation method and mathematical formula for each expense item are provided, which creates a foundation for ensuring accuracy and transparency. Thus, the state subsidizes carrier companies while requiring quality, safe, and comfortable transport services from them. Distance-based subsidization will be carried out by calculating the costs per kilometer. That is, whatever the transportation cost per kilometer along a route is, and whichever portion of this cost can be covered by passenger fares, if a difference arises, the state will subsidize this gap to encourage the carrier's operations and development. In calculating costs, all expense categories will be taken into account, including drivers' wages, technical maintenance and current repair costs, leasing or credit interest expenses associated with bus purchases, fuel, insurance, and others. The carriers' profit margin will be set at 10% of operating expenses.

Agil Asadov noted that carrier companies are generally not interested in operating along unprofitable or low-profit routes. As a result, the level of service in those directions drops, and service accessibility decreases. By eliminating such instances, the new rules will further stimulate the activities of carriers. The adopted rules, as a continuation of state programs and projects implemented toward the development of the transport sector and the enhancement of transport infrastructure in our country, also serve as an example of public-private partnership. Naturally, subsidization will boost private sector involvement and stimulate private sector development in the field of public transport services. Overall, subsidization will contribute to the modernization of the bus fleet, further improvement of public transport services, reduction of environmental harm through the deployment of more modern transport vehicles, and other positive outcomes.