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Platts' international price for gasoline has almost doubled since January 2021

 Platts' international price for gasoline has almost doubled since January 2021

Nika Chitadze

Professor of the International Black Sea University

Director of the Center for International Studies  



The global average retail price of gasoline has doubled over the past 20 years. This is a world trend, which has several main reasons, and the price of gasoline in Georgia could not ignore this inevitable reality. The price of various gas stations in the country has gradually increased. Only since October 1, the price has increased by an average of 10-15 tetri/liter, which is 3-4% of the price. In general, economists cite OPEC + 's restrictions on oil production, rising international prices for oil products, excise duty, and the GEL exchange rate as reasons.

Recently, the noticeable increase in prices in Georgia is mostly due to the first two reasons. S&P Global Platts is a platform that reports on the market price of energy products, including fuel. Through it, the price of fuel in the market is transparent. Platts allows customers to be convinced of how fair and objective the fuel is offered to them by oil-importing companies. For example, the price of gasoline at Platts increased from September 1 to November 1 to $ 822.25, an increase of 18% compared to September 1.

You can learn about the dynamics of gasoline price growth during the year from the statistics provided by Platts provided by the Union of Petroleum Importers.

 

As the data shows, the international price of Platts for gasoline has increased significantly this year. Which logically affects the retail prices of importers and sellers of petroleum products in each country.

In addition to the above, the price increase is caused by the strategy of OPEC +. Due to this strategy, there is an imbalance between supply and demand today. Despite calls from the leaders of the leading countries, OPEC + does not change the limit and raises the oil production limit by only 400,000 barrels per day. This increase is insufficient. The opening of the economy of different countries of the world also contributes to the growth of consumption. The resulting imbalance in turn makes fuel more expensive. Moreover, OPEC + forecasts that by 2022, fuel demand will reach 100.6 million barrels per day, which will be 500,000 barrels more than in 2019, the pre-pandemic rate.

Fuel excise tax rates are also high in Georgia, which affects fuel pricing. The increased excise tax in the country has been in force since 2017. Since that time the cost of excise duty on petrol has increased from GEL 250 to GEL 500 per tonne; For diesel - from 150 to 400 GEL.

The pricing of fuel, like any other imported product, is always reflected in the depreciation of the lari against the dollar.

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