Bulgaria: 14% Lower Gas Prices for March
The Commission for Energy and Water Regulation (EWRC) approved the price of natural gas for the month of March in the amount of 106.74 /MWh, excluding prices for access, transmission, excise duty and VAT. At this price, Bulgargaz ltd. will sell natural gas to final suppliers and to persons who have been issued a license for the production and transmission of thermal energy, announced the Commission.
The approved price of natural gas includes the component price of natural gas at the entrance to the gas transmission networks, the component for the activity "public supply" under Art. 17, para. 7 of the NRCPG and the component for compensating costs under Art. 11a, para. 2 of the NRCPG, covering the costs of "Bulgargaz" ltd. for storage of quantities in the gas storage facility in "Chiren", in fulfillment of obligations under the Emergency Action Plan.
The commission approved the price after an analysis of the current data and documents submitted yesterday by Bulgargaz ltd., which indicate the prices of the individual suppliers and the size of their quantities in the total mix. The regulator found that the total estimated quantity for the domestic market was provided by several different supply sources.
The price mix includes the entire agreed quantity of Azeri natural gas delivered via the "Bulgaria - Greece" interconnector/IGB/ at prices according to the current long-term contract with Azerbaijan. These amounts cover 33.54% of the country's consumption and are of key importance in achieving favorable prices for the blue fuel.
After organizing a tender procedure for the whole of 2023, "Bulgargaz" has concluded two contracts for the supply of liquefied natural gas (LNG) with traders from the region for the month of March. The contracts were concluded after a comprehensive evaluation of all bids submitted in the tender procedure, subject to requirements for a minimum delivery price and a proposed method of payment.
In the price mix for the month, the public supplier has also included quantities of natural gas extracted from the Chiren gas storage facility.
The secured quantities of natural gas for the month of March cover the commitments of the public supplier to final suppliers and heating companies, as well as the quantities under bilateral contracts with industrial customers
The confirmed price for the month of March of BGN 106.74/MWh is more than 14% lower than the price for the month of February, which was BGN 124.34/MWh. The main factor for this is the decrease in the stock indices of the international gas markets, as a result of the mild weather and the high capacity of the European gas storages. Due to the reduced estimated consumption of natural gas for the month of March, "Bulgargaz" has included in the price mix smaller amounts of production from the storage in Chiren, compared to the previously planned ones. The decrease in stock market quotations in February has enabled the public supplier to virtually continue injecting natural gas at significantly lower prices, which optimizes the price levels of stored quantities. As a result, the price of blue fuel from Chiren, which is a pricing element in the general mix, was reduced, and a reduction in the final price for the month of March was achieved.
"The continued decrease in the price of natural gas is a very favorable factor for heating companies, industry and end users. Bulgaria and the European Union did excellently after the suspension of supplies from Gazprom - market trends show that the apocalyptic scenarios of darkness and cold in the absence of such supplies were not justified and the previous extremely high gas prices remain in history," said the chairman of EWRC Prof. Ivan Ivanov at the open meeting held on 23.02.2023.
"In its pricing decisions, the Commission strives to achieve a balance, taking into account the interests of all interested parties. By setting an estimated annual price of heat energy, the regulator created security and predictability for all users of heating services. This price remained unchanged throughout the autumn-winter season, regardless of the sharp changes during this period in the price of the main price-forming element - natural gas," stressed Prof. Ivanov.
The decision of EWRC to confirm the price of natural gas for the month of March 2023 will be published on the website of the regulator.
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