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Monopolies in oil market cause discontent again

By Messenger Staff
Friday, February 26
There is something strange about the oil market in Georgia. An increase in oil product prices abroad instantly causes a similar increase in Georgia, however a price reduction everywhere else never causes one here. Analysts explain that this is due to the existence of monopolies in the country. “The major companies have similar policies in terms of prices to such an extent that it naturally raises suspicions about probable deals between them,” analyst Merab Janiashvili says.

Wissol, Lukoil, SOCAR, Eco Georgia and Rompetrol are the major players in Georgia’s oil products market. These companies take 65% of the market, the remaining 35% being owned by more than 30 medium-sized and small companies. It should be noted that fuel is imported to Georgia from 5 different countries: 50% from Azerbaijan and the rest from Russia, Bulgaria, Romania and Italy.

The biggest player in the Georgian market is Azeri Company SOCAR. It controls the largest part of the oil wholesale market, 60% of the petroleum market and 70% of the diesel market.

MP Nika Laliashvili from the Christian Democratic Movement has accused the administration of creating artificial problems for consumers and establishing a monopoly on fuel. He said that in Lagodekhi fuel costs GEL 1.90 and half a kilometre away in Azerbaijan it costs half that price. The Ministry of Energy does not give licenses to enterprises in Kakheti to produce diesel fuel, Laliashvili said.

The newspaper Banking and Finance recently conducted research which indicated that 1 litre of petroleum in Georgia should cost GEL 1.26, whereas in reality it is 50 tetri more and reaches GEL 1.80. A rumour has been spread among drivers in Tbilisi that Wissol premium fuel is not Italian but Azeri instead and they have demanded that its price is decreased. General Director of Wissol Vasil Khorava has called this accusation “groundless.”