Prices of natural gas to increase next year

"Fuel prices will rise by about 4 to 8% if an excise duty is introduced on natural gas," said the Chairman of the State Energy and Water Regulatory Commission, Angel Semerdjiev yesterday. The proposed taxation is stipulated in the bill for amendments to the Excise Duties and Tax Warehouses Act, which is being drafted by the Ministry of Finance (MOF). If natural gas is used as fuel for cars (known as methane), the rates will range around BGN 1.70 per gigajoule. But if it is used for heating, the excise duty will be BGN 0.20 per gigajoule. Only the natural gas for domestic use remains with a zero tax rate, explain officials from MOF. The bill stipulates an increase in the excise duty on diesel oil and kerosene as well - from BGN 615 to BGN 630 per 1000 l. End users would have to pay the VAT in addition to the new excise duty rates.

"The energy regulator does not control tax policies and therefore those duties will be directly included into the prices of natural," said Semerdjiev. An increase in the district heating prises is likely to take place as of next year, due to those excise duty rates, because most of the of district heating plants operate on gas.

In September, Dimitar Gogov, Executive Director of Bulgargaz announced that he was likely to request a further increase in natural gas prices as of January, which also might influence district heating prices.

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