Economy, News

High expectations about low prices

by | Oct 7, 2012

TBILISI, DFWatch — One of the largest petrol companies reduced the price of petrol by 8 tetris. A spokesman for the new government believes it is possible to decrease the price by 20 tetris, or about USD 0.13.

This comes soon after the leader of a coalition which won the parliamentary election called on business to not take part in monopolies and cartel agreements.

Due to differences in quality, the price of one liter of petrol varies from 2.13 lari (USD 1.30) to 2.33 (USD 1.50).

The petrol company Wissol decreased its price by 8 tetris on Saturday, according to a statement published on the company’s website.

The new prices are the following: Super – 2.25 lari (USD 1.40), Premium – 2.20 lari (USD 1.30), Diesel – 2.25 (USD 1.40), Regular – 2.10 lari (USD 1.27), Regular Energy – 2.08 lari (USD 1.26).

Wissol, which was considered close to Saakashvili’s government, made this decision the day after Bidzina Ivanishvili made his appeal to business about refusing to take part in price fixing.

The Georgian Dream leader met with representatives of Georgian and international business last Friday. The meeting was open for the media.

Ivanishvili asked business to refuse having monopolies and abolish cartel agreements. He promised the guests that the government and government officials will no more dare to intervene in private business. He says he will do everything to protect private property and business.

Bidzina Ivanishvili said the government will set up an anti-monopoly committee and said the current situation of an economy managed by monopolies and cartel agreements will not be repeated.

Levan Izoria, one of the Georgian Dream leaders, claims that when the coalition formally comes into power, the price of petrol will be reduced by 20 tetris (USD 0.13) on average.

He says prices are artificially increased and a monopoly situation barred companies from decreasing prices. There will be a competitive environment, which will oblige companies to decrease prices.

Otar Katamadze, Vice President of the sales department at Gulf, says it will be hard to decrease the price to 20 tetris, but it is possible to achieve an agreement based on a common decision. Gulf is another large petrol company also seen as close to the government.

Tengis Chichinadze, commercial director of Rompetrol, says that if Georgian Dream made such a statement it means they will an appropriate mechanisms to make it a reality.

Gulf and Rompetrol have not decreased their prices, like Wissol.

The problem of monopolies has been a frequent subject of criticism for economy experts in the country as it is a problem to develop the free market. Last year when Bidzina Ivanishvili first said there are monopolies supported by the government, President Saakashvili said repeatedly that he won’t allow artificially inflated prices and monopolies. He also said there is such a problem remarked in the pharmaceutical sector, but despite his statements, nothing has changed.

Heads of companies say the reason is that it’s the world market which sets the prices.



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