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Auto gas price rises due to gel depreciation

Energy company ‘Eko Gaz” released a statement that auto gas price increase was directly connected to devaluation of the national currency Georgian Lari and was not in any way caused by the main supplier of natural gas in Georgia company “Socar.”

In the middle of December the price of Compressed natural gas (CNG), at the auto gas stations increased by 5 tetris. This surprised the customers, especially followed by the drop of the Brent Crude Oil Price on the world market, and of petroleum, respectively.

Earlier representatives of the company “Eko Gaz” said that, after the appreciation of the US dollar towards Georgian Lari, they were forced to increase the price at gas stations by 5 tetris since, firstly the company holds bank credit in USD, secondly it buys natural gas from the supplier in USD, thirdly “Eco Gaz” buys spare parts of the gas compressor and other mechanisms in US dollars.

“We buy gas in US Dollars since the early independence of Georgia. We had been buying gas from Russian sources from early 2000’s. Dealing in USD has been a regular procedure since then, when 1 USD dollar was 1.40 laris or 2.0 such as today, says “Eko Gaz” representative.

The CEO of “Eko Gaz” Mr. Vladimer Pataridze announces: “The Company simply wouldn’t be too happy if the auto gas prices go up further, due to any causes. Since this type of fuel is used by only a small layer of population, and we are not anyhow interested in losing any more customers. This would be a big hit on the whole industry, which would dismiss the small players on the market, such as we are.”

“Eko Gaz” competitor and company “Gama” holds the same position on the subject. According to the “CEO” of the company David Chakhtauri: “This was a forced step to ascend the price, because the USD dollar sharply appreciated against national currency. The auto gas park in Georgia only consists of 10-15%, of the whole fuel industry, hence the market is very small. If the national currency keeps stable for few months the gas price would not increase any further.”

“We didn’t increase the price at the gas stations when the price of petrol was at 2.20 laris, because the national currency was stable. Besides there were no prerequisites, for example, there was no rise in price by supplier “Socar” whatsoever,” Mr Chakhtauri said.

At the moment, the price of one cubic meter of natural is 1.15 laris. In the middle of December the price rose by 5 tetris. Energy market players say the increase is purely connected to the devaluation of the national currency.