site.btaMore Expensive Natgas Should Not Push Up Prices of Goods - Regulator

More Expensive Natgas Should Not Push Up Prices of Goods - Regulator

Sofia, March 28 (BTA) - "The new higher price of natural gas is not supposed to affect the price of goods," Energy and Water Regulatory Commission (EWRC) Chairman Ivan Ivanov told journalists here on Tuesday.

"Over the last year and a half, natural gas has cheapened by 61 per cent. Producers did not reduce the price of their goods when this price fell, and now the goods should not appreciate, either," he pointed out.

The EWRC does not regulate the price of natural gas in Bulgaria. It depends on the supply contract between Bulgagaz and Gazprom Export which also covers the price of gas oil and black oil, Ivanov said. Between November 2016 and early March 2017 the price of crude oil increased substantially due to OPEC's decision, which was joined by Russia, to cut production, the EWRC Chairman explained.

In December 2016 Bulgargaz asked for a 13.5 per cent hike of the price of natural gas, but the EWRC increased it by 5 per cent. In this way, the public interest was protected, and consumers did not pay high prices for heating during the coldest period for years, Ivanov said.

The new price of natural gas will apply after the end of the current heating season. Ivanov has "serious hopes" that things will change until next winter. There will be a clear deadline for renegotiating the terms of trade with Gazprom and removing the price of gas oil and black oil from them. Besides this, crude oil has cheapened by 5 dollars since March 7-8, and the dollar has weakened as well, he added. These fluctuations could not be taken into consideration because Bulgargaz's price proposal is based on the crude price and the dollar rate by March 1, the EWRC Chairman explained.

Bulgargaz's proposal for a 29 per cent rise of the natural gas price, effective April 1, was submitted to the EWRC on March 10. The regulator will make its final decision when it meets behind closed doors on March 31.

Ivanov noted that the wholesale price of natural gas (per 1,000 cu m before VAT) has changed as follows: 630 leva in the first quarter of 2014, 603 leva in early 2015, 405 leva in early 2016, and 299.94 leva in the first quarter of 2017. Next quarter natural gas is expected to be selling at 383 leva per 1,000 cu m.