Fuel price is 12-15 tetri up in Georgia since January and it will increase by another 10-12 tetri in the next two weeks.
Price increase on the international market is the main reason for fuel price growth in Georgia. Price increase is caused by several reasons, including the start of vaccinations and statements made by the governments of countries, as well as the gradual easing of restrictions in various countries around the world, which increased the demand for the fuel.
According to Platts, diesel cost increased by 90 USD in a month and a half. 1 t of fuel costs up to 510 USD. Gasoline rose by 120 USD to 572 USD.
Since January, the cost of fuel has increased by over 25 tetri in Georgia, so price growth on the international market is not fully reflected in Georgia. The increase only amounts to 12-15 tetri at this stage. That is why retail chains in Georgia still predict the price increase.
"Despite a difficult 2020, fuel prices began to rise in summer after the strict restrictions were lifted. However, price growth became especially noticeable from this year, as the vaccine actually appeared on the market, which was followed by positive expectations: that the world economy would probably open up and demand would increase.
In the case of gasoline, the international price has increased by 120 USD since the beginning of the year, and in the case of diesel - by 90 USD. In Georgia, prices are also adjusted in the retail chain, the price has increased by an average of 15 tetri, and I want to tell you that prices are even higher in the non-branded chain. As for expectations, it is not really optimistic - price increase is inevitable, including in the wholesale market, prices have risen significantly. Therefore, retail chains for both branded and non- will have to increase prices in the near future”, said Vano Mtvaralashvili.
Zaal Iakobidze, the founder of Senta Petroleum, which imports wholesale fuel, says prices have not risen at a similar rate so far. According to him, wholesale fuel was 1.85-1.90 GEL early this year and today it is 2.10 GEL.
"In the last two months, the trend on the international market is constantly growing and prices are rising in Georgia, which is uncomfortable, but we are completely dependent on the international market.
The best indicator of fuel price change is the wholesale market - here the prices accurately reflect the reality that is happening in the world. The current wholesale price is record high for the last year and amounts to 2.10 GEL. Retail price is adjusted based on the wholesale price, however the final price depends on the profit margin of each company or their operating costs," said Zaal Iakobidze.
