Fuel prices in Georgia rise rapidly when global oil prices increase but decline much more slowly when international prices fall, economist and former National Bank President Roman Gotsiridze says. He describes the trend as the “rocket and feather effect.”
Gotsiridze attributes the pattern to weak competition and the concentration of the fuel market among several major companies. He also raised concerns about potential cartel practices, such as price fixing, market sharing and limiting supply.
He argued that reducing fuel excise taxes alone would not resolve the problem. Without stronger competition, he said, much of the benefit could go to oil companies rather than consumers, resulting in only a limited reduction in retail prices.
His comments come as gasoline prices in Georgia have increased by up to 50 tetri per liter over the past month and a half amid higher global oil prices and logistics costs. Gotsiridze called for stronger competition and more effective oversight of the fuel market.
