The Lukoil Bulgaria company has informed in an official letter the Bulgarian State Railroads that it is halting supply of diesel fuel to the State Railroad Company, BDZ.

The move is based on the Railroads' debt to Lukoil amounting to BGN 2.5 M, according to a high-ranking, unnamed employee of the Transport Ministry, cited by the Bulgarian TV channel bTV.

Economy and Energy Minister, Traicho Traikov, and Finance Minister, Simeon Djankov, have reiterated several times Bulgaria is not on the brink of a gas crisis, but BDZ is between a rock and a hard place – if it starts negotiations with other diesel suppliers, they face Lukoil's accusations of violating the bilateral 3-year contract. The contract bans delivery of fuel from Lukoil competitor companies.

bTV further sites their source saying BDZ will pay BGN 2.5 M to the company Monday and the Ministry is trying to secure the money. If the refinery decides to still halt the supply despite the payment, the Railroads would be able use the State reserves, which can provide the needed volumes for 15 days, and look for other suppliers on the market.

On Saturday, the cabinet released 1 800 tons of jet fuel from the State reserve. The fuel is destined for the airports of the Black Sea cities of Varna and Burgas where the summer tourist season is in its peak. Burgas currently has fuel to last only until Monday, Varna – until mid-week. Additional volumes for Burgas will be also redirected from the airport in the second largest city of Plovdiv. The order of the cabinet is for the release of jet fuel, kept in the Lukoil Bulgaria warehouses, for a week-long consumption.

Djankov and Traikov count on import from abroad to secure normal supplies for gas stations while the Interior Ministry will continue to receive for a month longer the fuel it had already ordered from Lukoil.

On Friday Prime Minister, Boyko Borisov, announced that crisis headquarters will monitor the situation on Bulgaria's fuel market after the local refinery of Russian oil giant Lukoil was forced to halt operations with Traikov heading the headquarters.

Bulgaria's Neftochim, the only oil refinery in the country, controlled by Russia's giant Lukoil, started on Wednesday to reduce crude processing to effectively stop production after the customs office revoked its licenses.

Vanyo Tanov, Director of the Customs Agency, has explained that the refinery cannot operate without the required electronic measuring devices Lukoil failed to install in its storage facilities, and can deal only with the fuels already outside the plant.

Valentin Zlatev, CEO of Lukoil Bulgaria, has often been described as "the country's back seat ruler" and "the oil oligarch, who pulls the strings of the government".

He is suspected of being the man behind Bulgaria's Prime Minister Boyko Borisov.

Zlatev has strongly denied the allegations.