Gas Prices in Bulgaria to Remain Unchanged by end-2013

Business » ENERGY | March 26, 2013, Tuesday // 17:56
Bulgaria: Gas Prices in Bulgaria to Remain Unchanged by end-2013 No major fluctuations in gas prices for end consumers are expected by the end of the year, according to Dimitar Gogov, CEO of Bulgaria's state-owned gas supplier Bulgargaz. Photo by BGNES

No major fluctuations in gas prices for end consumers are expected by the end of the year, according to Dimitar Gogov, CEO of Bulgaria's state-owned gas supplier Bulgargaz.

Starting April 1, 2013, prices of natural gas will drop by 3.89%, in line with calculations of the State Commission for Energy and Water Regulation (DKEVR), instead of the 3.22% price drop proposed by Bulgargaz.

Gogov, as cited by dnevnik.bg, made clear Tuesday that the 3.89% price drop would technically leave Bulgargaz without a profit.

He explained that the higher gas price decrease would be implemented at the expense of Bulgargaz' markup, which had been reduced to 1.26% from 2%.

The CEO of Bulgargaz made clear that the other factors which had made the price drop possible were the crude oil price of USD 110 per barrel and the lower USD-to-BGN exchange rate.

He went on to suggest that the gas volumes purchased by Bulgargaz had also contributed to the price drop, adding that the needs of the local market were substantially lower than predicted. Gogov specified that Bulgargaz would import a total of 523 million cubic meters of gas in Q2, 2013, while some 30 million cubic meters would be provided from domestic output.

Gogov further drew attention to the argument between Bulgargaz and the State Commission for Energy and Water Regulation (DKEVR) regarding the amount of the gas supplier's uncollected revenues, with Bulgargaz claiming that the energy watchdog had failed to take into account its uncollected revenues for 2011 and 2010.

The CEO of Bulgargaz explained that the company would have to take a loan to buy gas to fill the half-empty Chiren underground gas storage facility.

He did not specify the amount of the loan but said that Bulgargaz had already submitted the necessary documents with the Bulgarian Energy Holding (BEH).

Asked to comment on gas prices in the third and fourth quarter of 2013, he said that tariffs were expected to register a slight increase of 0.07% from July 1 as a result of an increase in the USD-to-BGN exchange rate, while from October 1, gas rates were expected to drop by 0.5%.

Gogov assured that the fluctuations were minimal and would most probably not affect prices for end consumers.

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Tags: Bulgargaz, gas prices, Bulgarian Energy Holding, loan, State Commission for Energy and Water Regulation, DKEVR

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