Bulgargaz demands a 15% price increase of natural gas as of July 1

Bulgargaz has demanded a 15.73% price increase of natural gas as of July 1, 2012 in its application to the State Energy and Water Regulatory Commission (SEWRC), deposited through the Bulgarian Energy Forum on Tuesday. The gas company insists on a price hike of BGN 109.95 per 1,000 cubic meters of natural gas - from BGN 699.10/1,000 cu m to BGN 809.05/1,000 cu m, VAT and excise duty excluded.

Bulgargas has pointed out three reasons for the demanded price rise. The first one is the stronger US dollar in Q2 2012 – BGN 1.47728 for $1 – and the expected higher exchange rates in Q3 2012 – BGN 1.55158 for $1. The second reason is “the wrong parameters in SEWRC’s report when setting the price of gas for the second quarter of the year and the actual necessity of higher proceeds than those received at the approved price of BGN 699.10/1,000 cu m, VAT and excise duties excluded,” read the notice posted on the company’s website. The third reason is the need to accumulate and store a reserve of 148.5 million cubic meters of gas in the Chiren depository for the next heating season. “In case this is postponed (which could increase the risk of insufficient supply in the winter of 2013), the marginal price will be BGN 766.73/1,000 cu m, VAT and excise duty excluded,” the gas monopoly warned.

“The price increase of natural gas will have an adverse effect on the Bulgarian economy,” said Vasil Velev, Chairman of the Bulgarian Industrial Capital Association. He voiced his hope that SEWRC will not approve such a high price increase of natural gas. “If the price is the same for everybody, it does not lead to loss of competitiveness. The problem is that the price of gas in our country is not at all low. And its increase is accompanied by higher electricity prices as well. At a time of a resuming crisis, this is not good news for Bulgarian businesses,” commented Velev. He predicted that, during the next quarter, we will witness an even worse performance of the Bulgarian economy.

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