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Controversy over gas tariff

By Gvantsa Gabekhadze
Monday, November 12
General Director of the Azerbaijan oil company SOCAR, Rovnag Abdullayev, arrived in Georgia to meet with Georgian Prime Minister, Bidzina Ivanishvili. A statement concerning the issue was made by the PM’s press service on November 9. The meeting with the company leadership and Ivanishvili was also attended by the Minister of Energy and Natural Resources, Kakhi Kaladze, Interior Minister, Irakli Gharibashvili and the chair of SOCAR representation to Georgia, Mair Mamedov.

“We have spoken on various issues concerning Georgian-Azeri relations. Of course we have also touched upon oil and gas policy. It was a very friendly meeting,” Ivanishvili stated after the closed meeting.

Ivanishvili emphasized that the Azeri side transfers gas to Georgia “at an interesting price” and the cost of gas is artificially increased inside the country. Ivanishvili underscored that the government will investigate which companies are involved in the illegal action.

Comment was made by Abdullayev as well. He has figured out that the company is interested in the increase of investments in Georgia.

“We will support Georgia’s economic advancement and are going to take part in the process,” Abdullayev said.

The Georgian Government does not intend to review the memorandums signed with SOCAR and INTER RAO. A statement regarding the issue was made by the Minister of Economy and Sustainable Development, Giorgi Kvirikashvili the same day.

According to Kvirikashvili the companies are among the state’s largest investors and collaboration with them is significant.

Concerning the tariffs, Kvirikashvili underscored that the issue is regulated by the Georgian National Energy and Water Supply Regulatory Commission.

“Only this body has the right to look over the policy of private companies and demand the decrease in price in the case that there are sufficient resources for this,” Kvirikashvili said.

Kvirikashvili believes that if there is an appropriate business environment and a transparent regulatory commission in the country, positive goals will be easily be achieved.

Kaladze is planning to meet with KazTransGas representatives regarding the decease of gas prices in the near future, the minister said after the meeting with the SOCAR representatives.

“We have met with SOCAR representatives. However, it was an introductory meeting and we did not speak in detail about gas tariff reduction. I will soon have a meeting with KazTransGas representatives and the public will be informed how much the gas price might be decreased. Gas price reduction is our priority,” Kaladze said.

In response, the chairperson of the Georgian National Energy and Water Supply Regulatory commission, Guram Chalagashvili already stated that a change in the tariffs is practically impossible.

According to him, the tariffs are in compliance with the legislation and a possible change of the tariffs depends on the price the company has to buy at.

“At anytime, the company can demand the review of the tariff, but tariffs would be lower by now if there was such an opportunity,” Chalagashvili said, adding that Georgia has the lowest tariffs compared with EU states.

According to the economic analyst, Liana Jervalidze, the current government has made two mistakes. One of the mistakes was appointing Kaladze on the post and the second one is concerned with making statements on tariff reduction.

“Even the most sensible man can not master the energy system swiftly, it requires time and experience. Secondly, the reduction of prices is linked with the state Regulatory Commission. The commission decides all issues regarding the tariffs. On the other hand, all statements made by the Prime Minister and other ministers concerning the reduction of tariffs can be taken as pressure on the private companies,” Jervalidze said.

According to her, only the Regulatory Commission might know if there is any resource for decreasing the prices.

“I would like tariffs to be reduced. However, I know one thing definitely; the price of gas transfer will not be lower than what SOCAR has on the border and will not be much less than the price in Europe and Turkey,” Jervalidze told newspaper Versia.