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AYFB: Competition Agency should Explore SOCAR’s Market Strategy

Andria Gvidiani, an analyst for the Association of Young Financiers and Businessmen (AYFB), makes a comment on invaluable competitive environment on Georgia’s autogas market and threats coming from dominant market positions of Azerbaijani SOCAR.

Based on the  natural gas market realities, one monopolist supplier operates on the market represented by SOCAR and naturally, this situation frustrates formation of competitive environment on the market and damages the interests of Georgian consumers, the Analyst said.

«Today only one supplier operates on the natural gas market, represented by Azerbaijani SOCAR. Naturally, this situation hinders formation of valuable competitive environment and the natural gas market bears losses, as well as Georgian consumers. SOCAR’s monopolistic positions have been debated many times, but the government has never taken due and effective steps, because, for many years, we had neither valuable legislation on competition nor antitrust bodies. Consequently, we have received the situation when our markets became entirely unprotected from monopolists and dishonest players», the Analyst said.

The competition agency should  explore SOCAR’s activities in terms of misuse of dominant market positions, the AYFB representative noted.

«Owners of gas filling stations note that on the autogas market SOCAR is  a dishonest player and this signifies the company distributes natural gas at far lower prices within its own network, as compared to other filling stations. Naturally, this situation evidently damages the autogas market.

As reported, the competition agency has already explored the natural gas market, but the performed job has not brought specific results, because the focus was made on only cartel prices. And now the competition agency should explore SOCAR’s performance entirely and carry out sanctions against the mentioned company.

Naturally, gas filling stations have expressed grounded doubts that SOCAR has been misusing its dominant market positions and this situation requires adequate reaction.

I believe today the competition agency  is the instance that responds to the market challenges in adequate way. Therefore, I believe the competition agency should explore SOCAR activities. Namely, paragraph C) of article 1 of the law on competition (misuse of the dominant position) determines specific situation  that hampers the competition development. To be precise, the mentioned article sets punitive measures against creating uncompetitive conditions to a certain category of trade partners by introducing discriminative conditions on identical transactions.

Consequently, if the exploration confirms  these doubts, appropriate measures must be applied against SOCAR. Naturally, adequate reaction to law violations will improve competitive environment on the market and establish just rules of game for market players», Andria Gvidiani said.