Autolpgas, a liquefied petroleum gas station network in Georgia, has been recognized as the most dynamic company in a survey by the most prestigious and influential business award ceremony, the Golden Brand.
Director of the company Nikoloz Khoperia shared his impressions of winning the company’s first Golden Brand award and reviewed the company’s operations in an interview.
Q. Autolpgas was named as the most dynamic and developed company. What led the company to this recognition, in your opinion?
A. We achieved this recognition through hard work and determination. When you are focused on getting things right, have good foresight and a team that works hard, it makes it easier for the company to succeed. Overall it is very difficult to introduce a new product to Georgia and have it become a favorite of Georgian customers. But we were able to do it, as we have since 2016.
Q. What do you mean by “new product”? Does this mean that liquefied petroleum gas was introduced to Georgia by your company in 2016? If so, why did you decide to bring this product to Georgia?
A. Until 2016, before we started converting cars over to liquefied gas, it was not used in Georgia for automobiles. It was used only for commercial and industrial purposes.
Regarding your question of why we decided to bring this kind of product to Georgia, as you know the majority of imported cars in Georgia are used. Thirty percent of these cars have already been converted to LPG in Europe, and so it was already happening.
We then dismantled these liquefied gas devices and threw them away, because there were no liquefied gas stations in Georgia. That is, Georgians paid the cost of this device when buying a car in Europe and then paid for its removal. We noticed this trend and decided to build liquid gas stations and the possibility of keeping these devices if the customers wanted and run the car on liquid gas, which is much more economical than other types of fuel.
Apart from this, tourists from other countries came in cars that ran on LPG, and they had no way to fill up in our country.
Q. How many liquid gas stations do you operate currently and do you plan to expand?
A. We have about twenty stations. The demand is high, but managing the stations is logistically very difficult. Liquefied gas is a specific product that can have natural losses. It needs a temperature regimen because it is very sensitive to temperature and is not an easy-to-operate product.
Q. On the company website we read that your business started in 2011 with Georgian Gas Import that was engaged in the import of Italian liquefied gas systems, and in 2016 you expanded operations with new stations under the name of Autolpgas. Please review this history for our readers/
A. Since 2011, we have been importing systems for converting cars from gasoline to natural gas and its components. We still import these from Italy. We cooperate with AB Electronics and are their only distributor in Georgia.
In 2014 the price of natural gas and gasoline almost equaled, as the price of oil fell and the price of gasoline went down. But the price of natural gas did not decrease. Back then, approximately 350,000 vehicles were registered as running on natural gas in Georgia. Since the price of natural gas did not decrease, people stopped pumping natural gas and started using gasoline again.
Until 2016 service centers converting from gasoline to gas were out of business, because new devices were no longer being installed. When we started converting cars to LPG, it was very unusual for the market at the time because there was no product awareness and no trust. Liquid gas and natural gas transfer devices overlap. So we offered liquefied gas, which was much cheaper than natural gas and gasoline.
Georgian Gas Import imports gas conversion devices, which we import from Italy, while Autolpgas is a network of filling stations, where customers can fill their cars with liquid gas imported from Russia.
Q. You said that before 2016 LPG was not used in cars in Georgia. What is the situation today since you introduced this product?
A. Many have started the same business. Now there are many companies operating in the same direction and the competition is quite high, which we welcome of course. Our company has a considerable market share and we can say it is the market leader. However, we welcome the fact that many companies are entering this field. The more service stations there are in Georgia, the more convenient it will be for the customers.
Q. What is the reason for high demand in your opinion – the low price of LPG or its almost harmless effects on the environment or human health as a low-carbon fossil fuel?
A. Unfortunately, not many people care about the environment in Georgia. Eco-friendliness is a determining factor in Europe, but in Georgia they choose liquefied gas because of the lower price. LPG is 50% cheaper than gasoline and is also a good product for the car. This is its advantage over gasoline.
To compare, last year 1,300,000 tons of gasoline and diesel were imported to Georgia, while the import of liquified petroleum gas reached 50,000 tons, which is about 4% of the fuel imported.
Q. I guess your competitors also import LPG from Russia, so what makes your company stand out?
A. High quality of product and service is what makes us stand out on the market. There is a difference in everything, you know that. Any product has a qualitative difference. We can confidently say that we offer our customers a quality product.
Q. As you import LPG from Russia, what challenges do the international sanctions imposed on Russia for its invasion of Ukraine create for your company?
A. Sanctions create quite a lot of problems for us, but not in terms of the product, because liquefied gas is not sanctioned either in the world or in Georgia. Nothing comes into Georgia from the side of the sanctioned companies. If the product is not sanctioned, then it is allowed on the Georgian market. We face problems in financial operations, but we ensure uninterrupted product supplies in our market. Our customers will not feel these obstacles directly.
Q. What are the challenges you face in our country?
A. We hope that our government will fulfill its obligations under the Association Agreement signed with the European Union and lower the excise tax on LPG, which will make the product even cheaper for the customers. If we look at the percentage calculations, the excise tax on eco-friendly fuel should be four times less than on gasoline. Now, unfortunately, Georgia is the only country in the world where the excise tax on both types of fuel is almost the same. We hope this will be changed soon.
