Bulgaria’s energy regulator expects natural gas price to rise by more than the forecast 14%

A new increase in the price of natural gas by 14% was discussed on December 29 by the Energy and Water Regulatory Commission (EWRC) With the proposal, the blue fuel will cost 117 BGN per megawatt hour. The price of gas has gone up by over 100% this year alone and we will obviously welcome the new year with another increase.

The head of Bulgaria’s public gas supplier, Bulgargaz, explained why a further increase in the price of the blue fuel was necessary.

"EWRC Chairman Ivan Ivanov called on the state to intervene with measures to compensate households and businesses," said Nikolay Pavlov, executive director of Bulgargaz.

The chairman of the Energy and Water Regulatory Commission, Ivan Ivanov, said there was a misconception that the energy regulator set the price of natural gas.

"I want to state quite clearly that the regulator, EWRC, according to the law and regulations, only confirms the price of natural gas. As regards the application, which comes from Bulgargaz, we check whether it is in accordance with the Bulgarian legislation, European legislation, the secondary legislation of the Republic of Bulgaria and in accordance with Bulgargaz's contracts with external suppliers, both from Azerbaijan and Russia, so EWRC does not have the freedom to determine the price, it only pronounces on the application submitted by the public gas supplier Bulgargaz and when the application is in compliance with the documents, which I have listed, the regulator then approves this price," explained Ivan Ivanov.

Will there be a new increase in the price of natural gas by 14%?

Of course, everyone sees that in the past 20 days and after the application submitted on December 10, the price of natural gas in European gas hubs has risen significantly due to existing tensions in Europe and the world and because on some days, the capacity of the Yamal. - Europe pipeline has not been used by the supplier Gazprom for quantities to Europe, Ivanov added.

"All this led to 180 euros per megawatt hour. But for futures transactions, the last thing that exists is that on Monday they ended at 108 euros, and on Tuesday at 104 euros and 55 cents per megawatt hour. In any case, this is significantly higher than the futures transactions that were the basis for the application that Bulgargaz submitted to the regulator on December 10. We should expect a significant increase in the price of natural gas. gas, as of January 1, for reasons that are really completely outside the country and beyond the ability of the relevant authorities in Bulgaria to significantly influence this price," Ivan Ivanov predicted.

The EWRC Chairman also clarified that since natural gas was outside the scope of the moratorium, it turned out that district heating companies in the country continue to calculate a very low price of natural gas in the invoices for their customers, domestic and non-domestic, and at the same time at the entrance the price of natural gas is rising rapidly.

"I hope that the executive branch and the National Assembly will take measures to compensate for these really big financial difficulties of the district heating companies," Ivanov said.

According to economic analysts, the state has the necessary financial leverage to offset the higher price of gas.

"Bulgaria benefits so much from electricity exports and quota sales that it can compensate at least for households and district heating companies and prevent increase in heating prices for households, i,e., these funds are available. It is just a matter of clarifying the mechanism and obtaining approval from the European Commission," economist Georgi Angelov said.

Employers asked why Bulgaria does not supply 1 billion cubic metres of cheaper Azerbaijani gas, agreed in 2013. And they do not accept the motive that the gas connection with Greece is not ready.

"With this mix we have, obviously there is no better price. The question is why we have this mix, why we do not consume more Azeri gas, but divert it, although there is a possibility on the existing gas pipelines and connections. This is a question that business is asking because it is known that Azeri gas is currently at a price many times better than the one we receive under the long-term contract with Gazprom, said Vasil Velev, chairman of BICA.

The final decision on how much the gas price will go up will be made on January 1 at a closed meeting of the energy regulator EWRC.

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