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Petroleum Products Prices Fell by 15-18% in Georgia

In recent months, the price of fuel in Georgia has reduced, but this reduction is not adequate to the  world oil prices – says the Association of Young Financiers and Businessmen of Georgia on the results of the analysis of global and local trends in energy prices.

The Association requires the Competition Agency to publish  preliminary results of the study of the oil market in the country, in order that the public really knew the reason why fuel in Georgia is inadequately  expensive.

According to a representative of the Association  Paata Bayrahtari, in July 2014 the price of oil in the international market was $ 115 per barrel, whereas today – only $ 48. In parallel with these in Georgia fuel prices have  reduced in stages several times but the issue of the adequacy of  the level of reduction remains critical.

“Since July 2014 in Georgia fuel became cheaper by 15-18%, while in the international market – by 58%. According to our calculations, one liter of Regular should cost no more than GEL 1.07 per liter in Georgia, in reality the price is GEL 1.79. It turns out that importers of petroleum products get a huge profit – 72-76 tetri per 1 liter of fuel, “- says the expert.

In his words, importers in such cases have  always the same counterargument – they bought fuel at a higher price, respectively, could not  reduce the cost of production as long as they sell an existing party at a relatively high price.

“Then why oil importers are not in a hurry to reduce the cost of oil products in Georgia in the backdrop of  a decrease in world prices and respond to increasing immediately? In reality,  the current situation can be explained by  the presence of cartel agreements on the market. The country has a number of independent gas stations, but they do not affect the overall situation in the market. A few large companies establish prices  in the market increasing  or decreasing  the price of fuel in parallel on the same level, so that it is not always relevant to  international processes. There are questions that nobody gives answers, “- Paata Bayrahtari notes.

As reported, on December 18 Prime Minister of Georgia Irakli Garibashvili demanded from  the of Competition Agency to find out the cause of inadequate reduction in fuel prices by Georgian importers in the 10-day period.

According to the head of the Agency Giorgi Baramidze, the study of the fuel market began, and its first results have already been sent to the head of the government,  while  the final conclusions will be made and released later….