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NGO TI: Fuel in Georgia meets standards set by the government

By Tea Mariamidze
Tuesday, May 28
Transparency International Georgia (TI), a non-governmental organization which researched Georgia's automobile fuel market in 2014-2018, reports that the fuel in the country is in line with the standards adopted by the government.

The organization says in recent years, the government has tightened automobile fuel standards.

"The Environmental Supervision Department periodically inspects gas stations - in December 2018, lab tests did not reveal the excess of lead in fuel," the research reads.

TI says they also tested the fuel quality of eight companies through a private lab.

"All studied samples, except one, met all the standards set out in the Government decrees. The low-quality petrol was purchased at B^P Oil, a gas station owned by Givi LLC. The Premium petrol of this company had low octane rates."

Moreover, a Public opinion poll of Transparency International Georgia has shown that nearly half of the population (46%) owns a car. The largest part of them (16%) consumes Rompetrol's fuel, Gulf and SOCAR took second and third places with 14% each.

"When choosing the fuel, a customer pays the most attention to its price and then the quality," the poll revealed.

As for the oil prices, the NGO concluded that fluctuation of fuel prices mainly depends on world oil prices, the exchange rate, and excise tax rates. According to the survey, the world oil price has decreased by 48% in the 5 years, but this was not reflected on local fuel prices as Georgian currency has depreciated by 53% and excise tax on fuel increased (from January 1, 2017, the excise tax per ton of petrol increased from GEL 250 to 500 and the excise tax per ton of diesel increased from GEL 150 to 400).

Regarding the competition on the fuel market, TI says it has increased since 2013.

"During 2012-2018, the number of fuel importers has increased from 7 to 57. During the same period, market share of large companies decreased from 93.4% to 69.5%," it says.

According to the NGO, Georgia entirely depends on imported fuel. In 2018, the value of imported oil and oil products reached $864 million, which is 9.5% of the total imports.

"83% of imported fuel comes from four countries: Russia, Romania, Azerbaijan, and Turkmenistan. Since 2014 the share of fuel imported from Russia has increased from 5% to 27%. In 2014-2018, the cheapest fuel was imported from Azerbaijan," says the research.

TI added that automobile fuel business is a vital source of budget revenue for the state, noting last year taxes collected from this business amounted to GEL 1.3 billion, which is the tenth of the total tax revenue.

"Turnover of automobile fuel retailers exceeded GEL 3 billion in 2017 and amounted to GEL 2.5 billion in 9 months of 2018. 10,050 people are employed in automobile fuel retailing, and this figure increases from year to year," says the organization.