Fuel prices rise, but no shocks expected, industry says

fuel prices rise but shocks expected industry says

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19:51, 08.08.2023

Fuel prices have gone up again in recent days. According to the industry, no shock increase in petrol and diesel prices is expected.

The reason for the rise is the increase in global barrel prices, the active tourist season in which people travel more, and the return of excise duty on propane butane. According to the industry, a lull is expected in the fall.

Prices in Bulgaria are about 12.23% higher than in the EU because our fuels are made from cheaper Russian oil compared to Brent.

August greeted us with a gradual increase in the price of petrol and diesel and more dramatically in the price of propane butane. According to fuel traders, the reason for the increase was driven by international quotation and the return of the gas excise tax in this country.

"In the past one month, several news items have come out at the same time, which has led to an increase in barrel prices and that is where this increase in the pump price is coming from, where it is slightly noticeable. I'm talking about the light fuels, you know about propane butane, with the new budget the excise duty on propane butane was restored, which automatically led to 22-23 cents from August 1," said Dimitar Hadzhidimitrov, vice chairman of the Association of Fuel Traders, Producers, Transporters and Marketers.

A typical trend for the summer season is also reported.

"Until a few months ago petrol was the leading price, it was much higher in price. Now petrol has been overtaken by diesel by a few points, so, as a short-term forecast within 2 to 3 weeks, I can say that prices will go up to about 2.70 BGN on light fuels. There is no such 3 BGN, there is no way to reach that at the moment," Hadzhidimitrov said.

According to analysts, the market in the country is dictated by the Burgas refinery, which is a monopolist and produces fuels from the cheaper Russian oil Ural.

"According to our calculations, there is about a 15 cents mark-up in petrol over what petrol actually costs, in our opinion, compared to the price of Ural, and about 10 cents in diesel. This is a kind of excess profit that is generated by the derogation that Bulgaria receives and that one company receives, so all these Russian disinformation messages that are flooding us, including about the price increase are not justified," he said.

Owners of small petrol stations predict bankruptcies if the state does not intervene in the sector.

"It is very possible that some of the smaller outlets in smaller towns will close. The state should intervene in the management of the enterprise. Things should be administered properly and the price should not budge. The price to the end consumer itself will depend on the profit margin of the retailer," said Ventsislav Pengezov, owner of a petrol station in Rousse.

Last week, the government announced a tender for a special manager through which the state would take over the operational management of the Burgas refinery.

Fuel prices rise, but no shocks expected, industry says

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