Russia's Game of Paper-Scissors-Rock...and Fuel

Novinite Insider » EDITORIAL | Author: Irina Samokovska |July 29, 2011, Friday // 15:48
Bulgaria: Russia's Game of Paper-Scissors-Rock...and Fuel

Bulgaria is in the grip of a new fuel supply crisis.

Unsurprisingly, Russia plays a prominent role in the new episode of the energy game of nerves.

To sum things up, Bulgaria is trying to make Lukoil Neftochim, a subsidiary of Russian oil giant Lukoil and the sole operational refinery in the country, install the mandatory measuring devices allowing control over taxable fuel released by the company on the market.

Lukoil, which also controls the biggest filling station chain in the country and a 29% share of the retail fuel market, has refused to provide the required remote connection to the customs administration and has had its tax warehouse licenses revoked.

The suspended permits can only be appealed in court, Bulgaria's Supreme Administrative Court (SAC), in a procedure expected to last no less than a year.

Lukoil Bulgaria CEO Valentin Zlatev has said that the company had expected a postponement, adding that one single piece of such electronic equipment took three years to produce, with which he prompted remarks that the construction of spare parts for space shuttles was less time-consuming.

If we refuse to accept the conspiratorial hypothesis that the current predicament is a well-staged theatrical performance, aimed at portraying Prime Minister Borisov as a hero in pre-election times and boosting the profits of Lukoil Bulgaria, we shall see the seeds of a war of energy independence.

The ones currently put in the line of fire are Finance Minister Simeon Djankov and Energy Minister Traicho Traikov, the latter entering a second momentous battle with Lukoil after questioning its domestic price-setting mechanisms at the expense of falling from Prime-Ministerial grace.

Djankov and Traikov are currently scraping fuel out of state-owned containers.

The two are doing their best to keep level heads, voicing assurances that the State Reserve has 160-day fuel stocks and aviation fuel for one month.

Djankov has gone as far as to enumerate a number of refineries that "are not so far off".

The situation is worst with aviation fuel, which is exclusively supplied by the Lukoil plant, and is scheduled to run out at the Varna and Burgas airports on Saturday.

It was made clear Friday that the procedure for accessing emergency state reserves of kerosene had been launched.

However, it transpired that a portion of the State aviation fuel stocks of was stored at the license-stripped, sealed-off, pending phase-out Neftochim refinery.

"On paper it is there, I hope it will be there in reality", Traikov said in comment.

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Tags: Lukoil, Lukoil Neftochim, fuel, Valentin Zlatev, Simeon Djankov, Traicho Traikov, VAT, tax, Customs Agency

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