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Whether Fuel Prices Keep Rising

Several days ago, fuel prices increased in major parts of refueling stations in Georgia, with the average upturn per liter making up to 5-6 Tetri.

The Caucasus Business Week (CBW) has examined reasons for growing fuel prices all over the country, as well as expected tendencies for the future.

“An absolute majority of gas filling stations in Georgia have increased fuel tariffs,” Vano Mtvralashvili, head of Union of Oil Products Importers, told the CBW.

“Tariffs growth tendency started earlier at non-branded gas filling stations, while several days ago, branded gas filling stations also increased fuel tariffs,” Mtvralashvili said.

“Several factors have provoked upturn in fuel prices, including oil prices on international market and GEL exchange rate against USD,” Vano Mtvralashvili said.

“Oil products prices have increased on international markets due to classes. OPEC member countries have agreed on oil extraction reduction. The agreement aimed at rising oil price and OPEC nonmember countries, including Russia, an influential oil extraction country, have also joined this agreement. Thus, oil product prices have considerably increased in the international market. Moreover, GEL exchange rate depreciated in relation to USD. Today, both factors are in neutral position and fuel prices growth was inevitable. The complexity of both components provokes a surge in fuel prices in the country. These two factors determine price correction in our country”, Mtvralashvili said.

“We should not expect fuel prices to increase further. We hope GEL exchange rate will strengthen and create a positive influence on the fuel prices,” he added, but he abstained to make exact forecasts and said it is difficult to make prognosis in similar situations.

Regarding the position of petrol refueling stations, a part of them refrained from making comments, while another part referred to international prices and GEL depreciation as a main precondition for upturn in fuel prices in the country.

SOCAR Georgia Petroleum

“No company wants to increase fuel prices. The cheaper the fuel, the higher turnover. This balance brings positive results to companies,” SOCAR Georgia Petroleum director David Zubitashvili noted. “SOCAR company was trying to avoid raising prices, but there were no other options,” Zubitashvili said.

Wissol

“Our company had preserved certain reserves to maintain prices, but now the company has bought oil at higher rates. Therefore, we had to correct fuel prices in Georgia too,” Wissol Group director general Vasil Khorava said.

«International markets demonstrate the tariff growth tendency and it is not ruled out that we will increase the price by 5 Tetri, again, in several days », Khorava said.

Per economic expert Paata Sheshelidze, “global market dynamics prove that, over the past period, oil prices have considerably increased. Additionally, GEL depreciation contributes as a serious factor.”

«Oil importers have to pay liabilities in USD. Therefore, they try to shift their burden onto consumers, based on the degree of risks», Sheshelidze noted.

“The solution lies in the reduction of oil excise tax,” Sheshelidze said.

According to the last report by Bloomberg, fuel prices on global market rose by 0.55%. OPEC also reports on growing oil tariffs. Under the last report, the value of a barrel of oil made up 48.63 USD, while several days prior, the price was 48.07 USD.

Prices at branded filling stations are as follows:

It should be noted that SOCAR and Lukoil have not changed prices, while Wissol, Rompetrol and Gulf companies raised prices by 5-6 Tetri.

Wissol filling stations: Eco Super – 2 GEL, up from 1.95 GEL

  • Eco Premium – 1.84 GEL, up from 1.79 GEL;
  • Euro Regular – 1.64 GEL, up from 1.59 GEL
  • Prices of Eco Euro Regular remains the same – 1.75 GEL;
  • As to diesel, the price of Eco Diesel is the same – 1.75 GEL; Price of Diesel Energy rose to
  • 1.60 GEL from 1.55 GEL.
  • As to Rompetrol petrol filling stations: Euro Premium – 1.83 GEL, up from 1.77 GEL;
  • Euro Regular – 1.61 GEL, up from 1.55 GEL. Price of Super is the same – 1.99 GEL;
  • Efix Euro Diesel – 1.80 GEL, up from 1.76 GEL; Euro Diesel – 1.61 GEL, up from 1.57 GEL.
  • As to Gulf stations, G-Force Premium – 1.82 GEL, up from 1.77 GEL; G-Force Euro
  • Regular – 1.72 GEL, up from 1.67 GEL; Regular – 1.64 GEL, up from 1.58 GEL.

Diesel price has not changed. Namely, Euro Diesel price is 1.75 GEL and Diesel price is 1.59 GEL.