Georgia’s five largest petrol and diesel fuel retailers were fined with total of GEL 51.6m for alleged price-fixing. Photo: Eana Korbezashvili/Civil.ge
SOCAR Georgia Petroleum and Sun Petroleum Georgia, which along with the country’s three other largest fuel retailers have been accused of alleged price-fixing, said on July 17 that they will challenge the multi-million fines imposed by the Competition Agency.
SOCAR Georgia Petroleum, in which Azerbaijani state company SOCAR holds 51% of shares, has been fined GEL 14.38 million.
Sun Petroleum Georgia, which operates a chain of petrol stations under the Gulf brand, has been fined GEL 11.26 million.
Wissol Petroleum Georgia has also rejected price-fixing allegations and said in a statement on July 16 that it will use all available legal means to challenge its GEL 10.42 million fine.
Two others – Rompetrol Georgia and Lukoil Georgia, which are facing GEL 10.84m and GEL 4.74m fine, respectively – have yet to comment.
SOCAR Georgia Petroleum said in its statement on July 17 that the price-fixing allegations “lack legal grounds”.
“We disagree with the decision of the Competition Agency and we will continue defending our interests through civilized legal means,” SOCAR Georgia Petroleum said.
The Competition Agency’s decision can be appealed in the Tbilisi City Court.
Sun Petroleum Georgia said in a statement on July 17 that the Competition Agency’s decision is “completely unacceptable” and it plans to appeal it in court.
Sun Petroleum is affiliated with the Petrocas Energy Group, where 49% of stakes are owned by Russia’s state-owned oil producer Rosneft and the rest is controlled by David Iakobashvili.
Sun Petroleum said that the fine imposed against the company – GEL 11.26 million – is almost twice as much as its net profit of GEL 6.2 million in 2012-2014.
In the same period, according to the company, it paid GEL 187 million in taxes to the state budget and donated GEL 1 million to charitable activities.
“It [the fine] will have an extremely negative effect on the company’s operations and development,” Sun Petroleum Georgia said in the statement.
It also said that the company is planning GEL 30 million investments, but the fine imposed by the Competition Agency will now “have an adverse effect” on its investment plans.
“It runs counter to the state’s declared priority of improving the business climate in the country, promoting job creation and attracting investments,” Sun Petroleum said.
Commenting on multi-million fines imposed by the Competition Agency, PM Irakli Garibashvili said at a government session on July 16, that the companies can dispute the decision in the court.
“This is completely transparent process,” he said. “I do not want the companies to get anxious.”
“We should promote development of competition in Georgia once and for all. This is our direct obligation to protect our citizens, consumers, as well as the interests of companies. But we should promote healthy competition. This is one of the commitments undertaken by us under the Association Agreement and Deep and Comprehensive Free Trade Agreement with the EU. I think that this is completely transparent process. If the companies have any complaint, the dispute will continue in court and the government does not interfere in this process,” PM Garibashvili said.
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