30.Jun .2022 14:00

Why Did Georgia Decide To Buy Russian Fuel? - Union Of Oil Product Importers

Why Did Georgia Decide To Buy Russian Fuel? - Union Of Oil Product Importers
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Russia has become the number one market for fuel imports for Georgia. In 2021, Turkmenistan held this position, but this year, due to a record increase in fuel prices, Georgian oil importers moved to cheaper markets and increased imports from Russia. In the first 5 months of 2022, Georgia purchased 494,538,000 tons of fuel worth USD 461 million. In total, the value of imports increased by 80%, while the volume of imported oil products increased by 7%. Imports directly from Russia increased by 45%.

Vano Mtvralashvili, head of Oil Product Importers explains the fuel import increase by the expensive fuel price on the international markets. As he notes, both small and large companies have started looking for alternative markets to import relatively cheap fuel.

"We have a different picture regarding gasoline. The price for regular fuel is reduced. Imports from Russia has led to a reduction in the price of this type of fuel in the local market.

Regular type fuel is the most consumed product. Since April, Russia offered low-cost fuel and large volume of regular fuel was imported from Russia in May. It enabled companies to bring fuel at a cheaper price by USD 400 compared to the international market.

Consequently, due to rising prices in the world market, we noted that companies which would import fuel from Russian, they would be able to reduce the price. The Competition Agency's conclusion and the call for price reductions naturally coincided. Entering the new markets and find a partner in Russia is very difficult. Today we have data that Russia has become the main import market for regular fuel, this does not apply to premium and super category gasoline," - explains Vano Mtvralashvili.

According to Mtvralashvili, regular type of fuel was reduced in price on the local market in June compared to May due to increased imports from Russia. Today, the price of 1 liter of regular gasoline at non-branded stations is GEL 3-3.05. As for premium and super type gasoline, due to the increase in fuel prices in the international market, premium and super type gasoline has risen in price by 5-10 tetri.