State plans for 100 petrol stations to improve competition in fuel market

Bulgaria plans to set up a state-owned company to manage oil and fuel reserves and build petrol stations across the country to boost competition and ensure fair prices for consumers, the government said on May 18.

It will build tax warehouses for fuel and a chain of petrol filling stations.

The unprecedented move by the government to decide for the state to enter the market for trade and storage of fuels came after an analysis at the beginning of the year, which showed that when Brent oil hit a historic low - a price reduction of 57%, then in Bulgaria oil prices have fallen by only 27 and 22 percent. An analysis by the Customs Agency has shown that in the big petrol station chains diesel was sold for 30 stotinki more expensive than the average price for the country. And in the tax warehouses it was offered at 50 stotinki more expensive. The situation is similar with petrol. In large chains it was offered at 20 stotinki more expensive than the average for the country, and in tax warehouses at 50 stotinki.

Today's cabinet decision envisions transforming the state's current oil reserves into tax warehouses, building new ones and building 100 state-owned petrol stations. The aim is to improve competition by offering fuels without drastic mark-ups.

Finance Minister Vladislav Goranov said the new State Oil Company would boost competition and ensure local fuel prices respond more quickly when global oil price fall.