Bulgarian energy regulator approves price of natural gas for 4th quarter of 2018

The Energy and Water Regulatory Commission has adopted a decision in connection with the application by Bulgargaz EAD for price confirmation for the 4th quarter of 2018, at which the public supplier sells natural gas to the end suppliers of natural gas and to customers connected to the gas transmission network.

At present, the natural gas market in Bulgaria does not have any factual preconditions for the formation of a competitive environment, and the Commission regulates the price of natural gas for end suppliers and customers connected to the gas transmission network by deciding on individual prices for each quarter of the year.

During the approval of the price of natural ga, the regulator takes into account the terms of the current contract between Bulgargaz EAD and Gazprom Export and fully implements the Methodology under which the changes in the price of oil and the alternative fuels to natural gas on the world markets for the last nine months, natural gas calorific value, and changes in the US Dollar exchange rate against the Bulgarian BGN. The regulator's powers are solely to determine whether the application of the public supplier Bulgargaz EAD meets the requirements of Ordinance No. 2 on the pricing of gas and the supply contract between the two companies.

In the decision of the regulator, the approved natural gas price for the fourth quarter of 2018, an which Bulgargaz EAD sells natural gas to end suppliers and customers connected to the gas transmission network, amounts to BGN 456.65 per 1,000 m3 or 43.28 BGN / MWh (excluding excise duty and VAT).

It is 13.89% higher than the current price for the third quarter of 2018 and is determined on the basis of an analysis of the economic justification in the application of Bulgargaz EAD, taking into account the change in the pricing factors and following calculations in accordance with the applied pricing model.

The price of BGN 456.65 / 1000 Nm3 approved by the regulator includes the component of "public supply" service under Art. 17, para. 6 of the Ordinance on Regulating the Prices of Natural Gas, at the amount of BGN 6.17 / 1000 nm3. The price includes the component "obligation to the society" under Art. 11a, para. 2 of the Ordinance, at the amount of BGN 1.40 / 1000 nm3, which covers the costs of Bulgargaz EAD for storage of quantities in Chiren gas storage facility in fulfillment of obligations under the Emergency Action Plan under Regulation (EC) No 994/2010.

The price of natural gas does not include prices for access and transmission through the gas transmission network and the customers should pay them to the end suppliers under the procedure of the Method for setting prices for access and transmission of natural gas through the gas transmission networks owned by Bulgartransgaz EAD.

Due to the preservation of the amount of the accompanying fees for access, transmission, distribution and supply of natural gas, the increase in the price for end households and business users of natural gas will be below 8%.

The decision of the EWRC to approves the price of natural gas for the fourth quarter of 2018 will be published on the regulator's website.

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