Fuel price hit a record high in Georgia. Price for Regular-type gasoline totals to GEL 3.71-3.77, while Premium-type gasoline cost exceeds GEL 3.85, and super - GEL 3.99. The price increase is totally due to the price growth on the global market. At present, the price of a barrel of oil is already USD 117, and the price of one ton of refined gasoline (Platts) is more than $ 1,000. Moreover, depreciation of national currency makes imports even more expensive.
It is possible to calculate the share of the components in the price of fuel. If regular gasoline costs GEL 3.71 on the retail market, the main determinant of its value is the purchase price or the prime cost of gasoline.
As of the Platts, prime cost of per liter gasoline is GEL 2.45, which is added by the state excise tax of 38 tetri and a value added tax of 18%. It means that, the share of VAT is 66 tetri. Accordingly, taxes of 1.04 GEL are added to the cost of 2.44 GEL, which is 3.48 GEL.
However, this is also compounded by oil companies’ other expenditures, which includes logistics, salaries, financial costs, other taxes, and profit margins. In total, 22 tetri accounts for this component currently.
The state can impact on fuel prices if the tax burden is revised. For example, by halving the excise tax, it is possible to reduce the selling price of gasoline to 25 tetri.
