site.btaNatural Gas Prices Are Fully Determined by Market Factors - Cabinet

Natural Gas Prices Are Fully Determined by Market Factors - Cabinet

Sofia, April 6 (BTA) - Power engineering should not be used for political purposes. The natural gas price in Bulgaria is fully determined by market factors. Any attempts to derive political dividends from the issue poses danger to the security of the energy system and the vitality of the energy companies in the country as well as the national security, reads a position published on the website of the Council of Ministers.

The natural gas price on the internal market is determined by an independent regulator, the Energy and Water Regulatory Commission (EWRC), in accordance with the effective Energy Act and Ordinance No. 2/2013 on the regulation of the natural gas prices.

The separate ministers and governments do not have powers to suggest energy prices or interfere in the regulator's work. The Commission members are elected by the National Assembly and controlled by the latter body.

Bulgargaz EAD buys natural gas at market prices in US dollars from Gazprom Export but sells the gas to its clients on the country's territory at regulated prices, determined by EWRC.

The management of Bulgargaz is responsible if it offers lower prices in violation of the law and thus causes financial troubles of the company. In accordance with its licence, Bulgargaz has to take care of its financial stability, reads the position.

In the first quarter of the year Bulgargaz sustained a heavy loss as a result of an non-balanced price decision of EWRC: instead of increasing the gas price by 13.54 per cent the regulator raised it just by 5 per cent. This incurred losses of over 35 million leva on Bulgargaz.

Bulgargaz is obliged to maintain reserves in the Chiren gas depot to the amount of around 300 million cu m annually. For this purpose, in the next six months the state company will have to pay around 100 million leva. About 80 per cent of these amounts will be go for compensation of uneven consumption, the caretaker government says.

The caretaker Cabinet will not undertake steps, that would expose the security gas supplies to a risk no matter what kind of pressure would be exerted on it, the position says.