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Is it Possible to Avoid Growth of Tariffs for Gas and Electricity?

Is it Possible to Avoid Growth of Tariffs for Gas and Electricity?

The increase in gas tariffs for corporate customers has been postponed for a few months, which caused joy among entrepreneurs, but the issue still remains on the agenda. Talk of a possible increase in electricity tariffs added to this.

However, after the public learned that the negotiations on this issue began, Prime Minister of Georgia Irakli Garibashvili criticized both the energy companies and the Georgian National Energy and Water Supply Regulatory Commission (GNERC). According to him, at this stage, no increase in tariffs is planned, and too much tension in the society shouldn’t be created. “If you discuss this topic, do it quietly, so as not to bring unnecessary tension in the country. Moreover, in the near future an increase in electricity tariffs is not planned, “- said the head of government.

According to the former Chairman of GNERC Guram Chalagashvili, the fact of the government’s intervention in the activities of the Commission is very regrettable, and it’s not happening for the first time. In particular, last year the Minister of Energy asked the company to review a number of documents and threatened to take certain measures against the regional electricity distribution company “Energo Pro.”

“Prime Minister’s current claims that it is not necessary to make the negotiations on tariffs growth public indicate that the Energy Commission approves those tariffs, which are required by the government,” – he says. In his words, the country is experiencing a difficult situation in terms of energy.

“A system built within a few years which had great potential and was the guarantor of economic stability, is actually falling apart. Work to rehabilitate the system has not been carried out for several months which is reflected in frequent power cuts. There are only two ways to get out of this situation.

The first is to increase tariffs, and if the government does not want this to affect the population, it should introduce subsidies. In turn, it will finally collapse the budget, since the state has no such money physically. The second way is to increase the rate without any subsidies at the expense of consumers, “- Guram Chalagashvili explains. As for the increase in tariffs for gas, the former GNERC Chairman says it does not matter whether the rate will increase only for corporate customers, or for all.

“In any case, the rise in price only for companies will lead to a 10-15% increase in product prices. In the end, the same consumers will have to pay. Therefore, there is no difference. For example, the bread will rise in price for all, if it does not become more expensive, then it will lose weight. In any case, people will buy as much bread as before but will pay more,”- he concludes.