Oil prices on the Georgian market

By Natalia Kochiashvili

Thursday, June 11

The Georgian Business Association hopes that the situation caused by the recent decline in fuel prices will have a positive impact on a number of industries.

At the beginning of 2015, there were about 960 petrol stations in the market, and in 2019 their number was 1210.

Georgian Competition Agency has published a review of the oil retail market. The document talks about the terms during which the price changes in the international market will affect the Georgian market. The Competition Agency's review shows that it takes an average of 2-5 weeks for global changes to take place in the Georgian market.

The time interval of reflection - the change in the price of the plate is reflected in the average retail price of fuel in the country in the interval of 2-5 weeks. This depends on the company’s stock before the change in the price of the plate. "Even in the case of maritime transport, imports into the country are carried out on average twice a month," the report said.

The document also shows that the competitive situation in the oil retail and wholesale markets has improved in recent years, which is due to the increase in the number of players.

Since 2013, in terms of imports of gasoline and diesel, as well as wholesale and retail sales, the number of operating economic agents has increased, the market concentration index has decreased, which is an indicator of the improvement of the competitive environment; In 2012, 8 economic agents were represented at the market import level, the number of which increased to 63 in 2019.

The total share of the 5 major economic agents operating in the market as of 2019 is 60%, while the total share of other companies is within 40%.

The decline in oil prices on the international market has been reflected in the prices of petroleum products sold at gas stations in Georgia, according to a statement issued by the Georgian Business Association.

As explained in the Association, the trend of strengthening the GEL in recent days has had an even more positive impact on the formation of different types of fuel prices.

Since the beginning of April, the price of gasoline and diesel at gas stations has been steadily declining, and the amplitude of the decline is about 70-80 tetri. “At the same time, customers of large branded companies, both individuals and legal entities, have the opportunity to take advantage of various discount systems, through which customers receive an additional 15-25 tetri per liter of fuel,” said the association.

However, as suggested by the Business Association, although oil prices have been rising in the international market for the past 2 weeks, prices at Georgian gas stations will remain around the current level if the current international market conjuncture and the Lari exchange rate continue to strengthen and stabilize.