Bulgargaz CEO Hints at Gas Price Increase from July

Business » ENERGY | June 7, 2012, Thursday // 17:57
Bulgaria: Bulgargaz CEO Hints at Gas Price Increase from July Dimitar Gogov, CEO of state-owned gas supplier Bulgargaz, has warned that July may bring a gas price increase, rather than decrease. Photo by Sofia Photo Agency

Dimitar Gogov, CEO of state-owned gas supplier Bulgargaz, has warned that if the contract envisaging an 11% discount on Russian gas supplies is not signed by June 11, the company will request a gas price increase from July.

In an interview published by Trud daily on Thursday, he does not specify the price increase Bulgargaz will propose to the State Commission for Energy and Water Regulation (DKEVR).

A few days ago, it emerged that the documents setting out the gas price reduction had not been signed conclusively due to a set of new clauses demanded by the Russian side in connection with the implementation of the South Stream gas pipeline.

Gogov goes on to cite other reasons for requesting a gas price increase from the energy watchdog, stressing that the price approved by DKEVR for the second quarter of 2012 is "starkly reduced", at 13% below the rate needed the company needs.

Bulgargaz' CEO says that the company reported an operating loss of BGN 91 M for the first three months of 2012, which increased to BGN 101 M in April.

"It is obvious that the gap between buying and selling prices of natural gas is not to our benefit," he adds.

Gogov explains that Bulgargaz signed agreements with Gazprom subsidiaries setting out the gas discount, but the papers were never returned signed.

He notes that the more expensive US dollar will also affect Bulgargaz' gas price proposal to DKEVR.

Regarding the steps taken by Bulgargaz to make indebted heating utilities pay their gas bills, Gogov emphasizes that Bulgargaz will immediately face sanctions and a suspension of gas supplies as soon as it becomes an rregular payer.

Gogov reminds that the state-owned gas supplier did not resort to restrictive measures during the heating season, despite the fact that the debts of the utilities increased with each month.

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Tags: Dimitar Gogov, Bulgargaz, gas supplies, Gazprom, discount, South Stream gas pipeline, heating utilities

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