Bulgaria's Gas Supplier to Request 9% Price Cut in Q1, 2013

Bulgaria's state-owned gas supplier will seek a reduction in Q1, 2013 gas prices by around 9%, according to Bulgargaz CEO Dimitar Gogov.

Speaking Wednesday at a press conference at the Ministry of Economy, Energy, and Tourism (MIET), Gogov made clear that the gas prices entering into force on January 1, 2013 would also depend on the USD-BGN exchange rate.

Bulgargaz is to submit its proposal for gas prices in Q1, 2013 to the State Commission for Energy and Water Regulation (DKEVR) on December 10.

A reduction in prices of natural gas is largely expected to result in lower heating tariffs.

The decrease in heating tariffs is anticipated as a result of Bulgaria's new gas supply contract stipulating a discount of over 20%.

The new direct gas supply contract between Bulgaria and Russia was signed in mid-November and is to take effect in January 2013.

Apart from the discount on Russian gas, Bulgargaz also vowed to reduce tariffs for heating utilities.

On November 19, Dimitar Gogov suggested that heating utilities could expect a discount of up to 7% in gas prices.

Meanwhile, experts cited by econ.bg have argued that heating and hot water rates may drop by up to 5% in the case of a 7% reduction in gas prices.

During the press conference on Wednesday, it was announced that Bulgarian heating utilities owe a total of BGN 184 M for gas supplies to Bulgargaz, including the BGN 167 M debt of Sofia heating utility Toplofikatsiya Sofia.

Gogov commented that suspending gas supplies to indebted heating utilities was one option but not a priority.