Only War in Middle East Can Drive Oil Prices Higher - Bulgaria's Energy Minister

Business » ENERGY | March 7, 2012, Wednesday // 18:02
Bulgaria: Only War in Middle East Can Drive Oil Prices Higher - Bulgaria's Energy Minister Energy Minister Traicho Traikov has said that low fuel prices in Bulgaria can be achieved by boosting competition in fuel import and distribution and tax warehouses. Photo by Sofia Photo Agency

Traicho Traikov, Minister of Economy, Energy and Tourism, has said that low fuel prices can be achieved through free competition in distribution, import, tax warehouses.

"If the price of some item is way below its market value, it will simply disappear from the market," Traikov told journalists on Wednesday in Parliament.

Prior to Traikov's statement, MPs voted down a proposal of nationalist party Ataka for a 6-month moratorium on wholesale prices of automotive fuels.

"Technically speaking, there is no way to impose a moratorium," the Energy Minister commented.

He drew attention to the fact that the current fuel prices in Bulgaria were so high that there was no reason to increase them "unless, God Forbid, a war breaks out in the Middle East".

Traikov said that he received daily reports from his team of experts on fuel prices in Bulgaria as compared to fuel prices in the other EU Member States.

"Provided that we have the second-lowest excise duty rate in the EU, fuel prices should also be the second-lowest – I mean fuel prices with excise duty and without VAT. Bulgaria, however, occupies third or fourth place," he specified.

The Energy Minister pointed out that there was potential for price reductions but reminded that Bulgaria had been 7th or 8th one year ago, "which means that the current rates are closer to the excepted ones".

Traikov expressed hopes that the cartel probe of the Commission on Protection of Competition (KZK) would bring satisfactory results.

KZK acted on a tip-off from Transport Minister Ivaylo Moskovski for automotive fuels and from Minister Traikov about jet fuel.

"We are experiencing problems with the functioning of the fuel market, there needs to be real competition. This market is plagued by competition issues," said Martin Dimitrov, Co-Chair of the right-wing Blue Coalition.

He insisted that there were competition violations and abuse of dominant position on the market, which he said could be resolved by alleviating the import regime.

"A few days ago, diesel prices in Bulgaria were higher than in Spain, Slovenia and Slovakia," Dimitrov added.

"If we could solve the problem through a moratorium, I would support it, but I do not believe that this will work. We obviously need to achieve a more competitive environment," said Valentin Nikolov, Chair of the Parliamentary Group of center-right ruling party GERB.

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Tags: competition, cartel probe, KZK, Commission on Protection of Competition, fuel prices, Energy and Economy Minister, Traicho Traikov, excise duty, VAT, Ataka, GERB, moratorium, jet fuel, Ivaylo Moskovski

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