Petrol Prices Up in Georgia

Petrol prices have significantly increased in Georgia in recent days. During the last days, the gasoline price has been GEL 0.5-0.8 up which caused dissatisfaction of the consumers.

Experts say the main reason for the price change is increased price on petrol on the global market, which affected Georgia as well.

However, they also name the second reason- devaluation of the Georgian currency GEL (lari) which has been depreciating during the last weeks against the US Dollar. If on October 8 $1 equaled 2.6168 GEL, on October 10 it amounted to Gel 2.6255. Last week it was GEL 2.6150.

Head of the Union of the Oil Products Importers, Vano Mtvraliashvili says there are record high prices on petrol in the world.

“This factor and devaluation of the Georgian currency during the last month caused increased prices on oil products in the country by GEL 0.5-0.8. I think that it can get even worse in the future,” he stated.

Economist Zviad Khorguashvili says there is a way to stabilize prices on the local market if the government reduces the excise tax on oil products, which was doubled from January 2017.

“Today, oil importers pay the government GEL 0.50 excise fee per liter petrol. If the tax is reduced to 0.30-0.20 GEL it will prevent the increase of prices on oil products and gas. Everything depends on the government,” the expert says.

According to Khorguashvili, if the government does not take proper steps, high petrol price will result in increased prices of other products as well.

The Parliament of Georgia adopted a bill increasing the excises on tobacco, motor vehicles, oil products, as well as taxes on gambling, starting from January 1, 2017.

On oil products the excise tax increased in a following way:
- Petrol - from 250 GEL up to 500 GEL
- One tons diesel - from 150 GEL to 400 GEL
- 1,000 cubic meter (m3) - from 80 GEL to 200 GEL
- Motor oils – from 400 GEL to GEL 800