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Consumer Protection Association: In Georgia, Fuel is Sold at a Profit of GEL 0.82

The Consumer  Protection Association of Georgia and the protest  movement against high fuel prices will hold a protest on December 26.

They intend to put before the Competition Agency the issue on the need to study the activities of oil companies operating in Georgia.

According to the head of the Consumer Protection Association  Beka Kemularia, protests in the country have long matured as the price of motor fuel is  inadequate to a situation on the world oil markets. Just for this reason it was decided  to hold a protest.

“As of December 11, 2014,  the international price of gasolineamounts to USD  547,  this is GEL 1 056 at the rate of  GEL 1.84 per US dollar plus an  excise tax in the amount of GEL250 thus we get  GEL 1 306. One ton of gasoline is equal to   1 330 liters. It turns out that the cost of 1 liter of gasoline including an excise tax makes GEL 0.98. To this we must add the cost of transportation and sale. According to the company’s financial statements, transport, selling, administrative and fiscal costs per a liter of gasoline amount to GEL 0.10. Plus  VAT – 18%, or about GEL  0.19,5. Ultimately, 1 liter of Premium petrol on the territory of Georgia costs GEL 1.27 and the retail price – an average of GEL 2.09, that is GEL 0.82  or 64%. Such a high percentage of profit does not exist anywhere in the world. This happens only in Georgia,”- Kemularia notes.

According to him, the prices should be regulated by the market, and the company should decide for themselves what should be the value of their products, but this should be done only within the law.

“In developed countries the practice is just the opposite to ours – profit margin on products sold quickly is very low there because due to the high turnover of the company, in any case, they enjoy a very high profit. We have claims to local companies, but we have no leverage in order to prevent arbitrariness on the part of the oil business. The 30th article of the Constitution of Georgia states that the citizens of the country are protected from monopolists, cartel deals and redistribution of the market. The Competition Agency should directly deal with  this issue. If it finds that the company enjoys  a dominant position in the market, they must be fined in the amount equal to 5% of annual turnover. Such sanctions are provided by law, “- Beka Kemularia notes.

Participants of the rally also plan to file a  claim in the Competition  Agency about rising prices of autogas.