QUBA, Azerbaijan (Reuters) - Falling oil prices sparked rare demonstrations over the rising cost of food in Azerbaijan last year, but a police crackdown and the deployment of a Soviet-style civilian militia have snuffed out the protest movement.
"Who wants to spend the rest of his life in prison?," said Uzbek, a taxi driver who said he was jailed for a month for protesting against galloping flour prices in the town of Quba.
The protests, which erupted across the oil and gas-producing country in January last year, raised the specter of instability in Azerbaijan, ruled by the same family since the early 1990s. Police broke the demonstrations up using water canon, batons and tear gas.
The heavy-handed response poses a potential problem for the European Union and EU firms cooperating with Azerbaijan to link a chain of pipelines due to carry Azeri gas to European markets by 2020.
The EU wants the project to work because it will cut Europe's dependence on Russian energy. But it does not want to be seen to be enriching a government that outlaws peaceful protests and jails anyone who defies it.
Interviews with some of the protesters in three different areas -- Quba, Siyazan and Shabran -- suggest Azeri authorities cracked down in a way that is likely to alarm policymakers.
They spoke of mass arrests and jailings, police brutality, punitive bans on work in state institutions, and police threats of more jail terms.
The authorities, resurrecting a Soviet practice, drafted local volunteers into a community militia. On the face of it, the militia is supposed to help police deal with minor law and order issues, but some residents said their function is to notify police about any stirrings of dissent.
Arun, a student in Siyazan, a town 90 kilometers (55.92 miles) from Baku, said about 50 people there had been arrested.
Most people he knew had been jailed for around a month, but some had been held for as long as six months, he said, and some had been beaten in prison.
Ehsan Zahidov, a spokesman for the Azeri Interior Ministry, said allegations of police excess were wide of the mark.
"We did not get any complaints from those who had been arrested," he told Reuters. "Why they did not complain if they were treated badly? They could also have taken their cases to courts. This information is not true."
The Italian office of the Trans Adriatic Pipeline firm, responsible for developing infrastructure to carry Azeri gas to southern Italy, declined to comment on the crackdown. Italian energy firm Snam, a 20 percent shareholder in the same project, also refused to comment, as did the Italian industry ministry.
Soon after the unrest, President Ilham Aliyev, who took over when his father died in 2003, moved to consolidate his family's grip on power.
He changed the constitution via a referendum last year to lengthen presidential terms to seven from five years and made his wife First Vice President in February.
Diplomatic sources say Aliyev plans to further consolidate his power by appointing a close ally as prime minister after Artur Rasizade, the veteran incumbent, retires.
"He will be replaced by a person who is close to the ruling family," Leyla Aliyeva, an independent analyst, told Reuters.
Aliyev supporters say he has brought stability, modernization and closer ties with Europe. Prestige projects have included hosting the Eurovision song contest, the inaugural European Games in 2015, and Formula One racing last year.
But rights advocates accuse Aliyev's government of muzzling and jailing opponents, charges it denies.
Sliding oil prices have hit Azerbaijan -- which relies on oil and gas for about 75 percent of state revenues -- hard. The economy shrank by 3.8 percent year-on-year in 2016 and annual inflation accelerated to 12.4 percent.
The national currency, the manat, fell sharply and had to be officially devalued twice. That made imports more costly, pushing up prices for staples such as bread and flour.
In Quba, a town of about 38,000 people in the foothills of the Caucasus mountains, protesters say police arrested about 30 people and held them for about a month.
Today, there is no visible sign of extra police on the streets of Quba, an agricultural region near the border with Russia. But residents say even minor public quarrels are now swiftly broken up by police and punished.
Ekhtiram, a fruit trader, said he had been arrested for protesting last year. He complained prices remained high and that corruption among customs officers continued to flourish.
The creation of the militia, a move which has evoked memories of Soviet-era informers, had deepened people's fears, he said.
"We know that there are people who are watching and listening to others and then reporting to the police," he said.
By law, they are meant to wear uniforms so that people know who they are. In practice, demonstrators say the volunteers wear plain clothes to make them harder to spot.
"This institution was only created to strengthen our country's military-police regime," complained Arif Gajily, the leader of the opposition Musavat Party.
(Reporting by a Reuters reporter; Additional reporting by Stephen Jewkes in Milan and by Gabriela Baczynska in Brussels; Editing by Andrew Osborn and Peter Graff)