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“Lukoil”: In Georgia, Gasoline Prices are Lower than Real

Minister of Finance of Georgia Nodar Khaduri met with representatives of the oil business and discussed the situation in the industry, possible measures for its development, the necessary legislative changes, etc.
According to Deputy General Director of “Lukoil – Georgia” Shavleg Mishveladze,  the meeting was initiated by the  representatives of the oil business, who  introduced the Minister with  their recommendations, the implementation of which could contribute to its development.

“The meeting was focused on several issues. The  Minister instructed to  create a special group that will work on our proposals, “- he says.

“A lot of issues that are relevant to our industry have been discussed. In particular, this applies to the natural loss of oil products. Currently, this issue is regulated, but applies only to customs cleared fuel. While the oil companies have to store bonded fuel in terminals and losses – for example, the natural evaporation of fuel takes place there. Therefore, we believe that the assessment of loss should touch bonded  fuel as well,”- says the businessman.

In his words, the issues of facilitation in cases of force majeure were also discussed.

In addition, according to Mishveladze , the research conducted by the Antimonopoly Service on the presence of monopolies and cartel deals on the fuel market were also discussed.

“We have met with representatives of the  Competition Agency several times, and intend to continue such meetings. We are ready to cooperate in order to put an end to the protracted conversations and debates on this subject – as if  monopoly existed on the fuel market, that the oil companies are operating at very high profit margins, etc. It’s time to end this. We are ready to cooperate, “- say  in  ” Lukoil “.

He notes that  the price of fuel in Georgia is not only adequate, but even lower than it should be.

“In these import-dependent countries such as Georgia, the price of petroleum products is determined by two factors – the world prices and the exchange rate of the national currency. If GEL devaluation and hikes in  international oil prices that we are now seeing continue, we will inevitably have to raise prices. I cannot yet say when that it might happen, as it depends on many factors. But if we take such a decision, it will be enforced. We will try to avoid the price increase. Recently, the Prime Minister expressed his assumption about the fact that fuel prices in Georgia are  inappropriately high, but it was only his assumption. In fact, prices in the country fully reflect reality. Moreover, they are even lower than should be, because logically oil  products must be higher than they are currently. We are still waiting – we hope that the national currency will strengthen and growth trend of international oil prices will be replaced again by a downward trend, “- the businessman notes.