TBILISI, October 9 – Georgia’s government has pushed back against calls to temporarily cut fuel excise taxes, arguing that even halving the tax would not be enough to return gasoline and diesel prices to where they were six months ago.
Deputy Finance Minister Giorgi Kakauridze made the case at a joint parliamentary committee meeting on Thursday after opposition MP Giorgi Sharashidze of For Georgia asked whether the government could consider temporary relief from excise duties as fuel prices rise.
Kakauridze said cutting the excise tax in half would reduce the price by about 25 tetri, but warned that movements in international oil prices could quickly wipe out the effect.
He argued that Georgia has limited ability to significantly influence domestic fuel prices while international markets remain volatile, saying greater stability in regional and global oil markets would be needed for prices to settle.
Sharashidze argued that higher gasoline and diesel costs are feeding into prices across the economy and putting pressure on households and businesses. He asked whether temporary reductions, postponements or other excise relief could be considered, pointing to measures he said had already been used in Germany and the United States.
But the Free Business Association challenged the government’s position, saying an excise cut could provide immediate relief even if it could not fully reverse the recent rise in fuel prices.
The association estimated that halving the excise rate could cut the price of a liter of gasoline by almost 19 tetri and diesel by 17 tetri. It said such a reduction, if introduced immediately, could cost the budget no more than 250 million lari, based on excise revenues collected from petroleum products during January through August.
The group argued that the actual cost could be lower because the petroleum excise category includes products that would not necessarily be covered by the proposed reduction. It also said higher revenues from other sources, including fines and value-added tax, could partly offset the shortfall.
The association stressed that any tax reduction could be temporary and shorter than six months, further limiting the impact on state revenues.
