A session of the temporary parliamentary commission investigating the pricing structure of food products, medicines, and fuel was held with the participation of oil company representatives, during which the fuel market structure, the pricing chain, and the sector’s operational processes were examined in detail.

“In recent months, energy prices have risen significantly, driven largely by international factors, in particular, the situation in the Strait of Hormuz. As a result, over the past two months, energy prices have climbed sharply and reached a critical threshold. Before this crisis, Georgia had some of the lowest fuel prices in the region, particularly by comparison with European countries. The increase in fuel prices in Georgia has been considerably more modest than in other European countries,” said Commission Chairman Shota Berekashvili in his opening remarks.

Representatives of the invited companies, Gulf Georgia, Wissol Group, Rompetrol Georgia, SOCAR Georgia Petroleum, Lukoil Georgia, Connect Georgia, and the Georgian Association of Petroleum Products Importers, presented detailed information and spoke about capital and operational costs, as well as fiscal obligations.

As the representatives noted, Georgia is a net importer of petroleum products, and fuel prices are directly linked to developments in international markets. They explained that the final price of imported fuel is determined by the sum of taxes imposed under Georgian law, such as value-added tax and excise duty, plus costs for logistics, distribution, and banking services. Taking all such expenses into account, companies’ net profit margins amount to between 2.5 and 3 per cent. They further noted that the petroleum products industry is one of the most fiercely competitive sectors and that companies set their prices in accordance with the competitive environment.

The invited guests responded to questions from commission members covering the dynamics of fuel price movements over the past two months, the volume of petroleum product reserves, the number of filling stations, staff remuneration, costs associated with fuel supply across retail networks, and the factors bearing on fuel prices.

The commission’s chairman has summed up the session.

“An instructive discussion took place at this meeting. It was noted that two significant components determine price formation: international prices and the stability of the national currency. The sharp rise in international petroleum product prices has driven fuel price increases across the sector. It should also be noted that energy carrier prices on international markets have risen considerably more steeply than in Georgia. We are hopeful that the situation will stabilise and that international energy prices will begin to fall. Fuel prices are of particular importance to consumers, as they determine the cost of transport and logistics and, more broadly, create significant inflationary pressure on the country’s economy. The commission will study the views put forward by the oil company representatives and will prepare corresponding recommendations, which will be reflected in the commission’s final conclusions,” Berekashvili said.

The temporary parliamentary commission investigating the pricing structure of food products, medicines, and fuel is due to present its conclusions on May 1.