Concerns about gas price

Georgian analysts and the population in general are unanimous in welcoming the long term agreement on natural gas supply from Azerbaijan. The only alternative for Georgia was Russia, and this has been avoided.

For Russia, selling gas is not only business but the tool for applying political pressure, not only against Georgia but Europe as well. Georgia has managed to escape from being dependent on Russian natural gas.

There is however one mystery in the Georgia-Azeri bilateral agreement. There is no official indication of the price Georgia is paying or is supposed to be paying for Azeri gas. This kind of omission naturally gives birth to rumour and suspicion.

Economist Gia Khukhashvili suggests that the only reason for the authorities to hide the real price of Azeri gas is the sum Georgian consumers pay for it. Today the Georgian consumer pays GEL 0.51 for one cubic metre of natural gas. Those who will become clients of Georgian gas distribution companies will then pay GEL 0.69. The analysts are confused as to where this price comes from, as we don’t know the price of the gas we buy. Georgia receives a certain amount of natural gas free of charge, as compensation for its transit services, and it is unclear how much of this free gas is factored into the tariff imposed on consumers.

The independent body which should control natural monopolies’ activities in the country is the antimonopoly service. This however has been “successfully” put out of commission by the Rose Revolution administration.