site.btaPM Warns that Any Shorterning of Deadline for Removal of Lukoil Exemption Heightens the Risk of Fuel Price Spike

Prime Minister Nikolay Denkov warned Thursday that any shortening of the deadline for removing the exemption for Lukoil from the EU ban on use of Russian oil heightens the risk of fuel price spikes. He was speaking after a meeting of the Security Council with the government, which discussed proposals for earlier removal of the exemption. 

By the effective legislation, the exemption is due to expire in October 2024. GERB and the Movement for Rights and Freedoms want it to be done sooner, even immediately. Continue the Change - Democtratic Bulgaria argue that the soonest possible for lifting the derogation is March 1.

The Prime Minister showed to the news media a report that justified Parliament's decision on the scrapping of the exemption. It says that the shortest possible deadlines for phasing out Russian oil are: after December 31, 2023 when Lukoil Neftochim Burgas will use no more than 50% of Russian oil; after Januarry 31, 2024 for no more than 25% of Russian oil; and March 1, 2024 after which the oil refinery will use only non-Russian oil.

Denkov read out the decisions taken at the Security Council, which he said lasted 3.5 hours and "was quite informative so as to allow us to discuss all risks and ways to minimize them". He stressed that risks were discussed in terms of the refinery's ability to operate so that it would not shut down if it does not receive oil. The second risk is what could happen in the fuel market if the refinery's capacity is reduced or if it shuts down. Russian oil must be phased out because switching to non-Russian oil overnight creates technological risks, Denkov explained.

He added that the decision of the Security Council confirms the conclusions in an August 29, 2023, report by the Minister of Economy and Industry and the Minister of Energy in coordination with the Minister of Finance and the Minister of Transport and the heads of the State Agency for National Security, the military intelligence and the State Intelligence Agency.

Asked if he worries about fuel price spikes, Denkov said he does. "That is why in the timeframe provided in the previous report we minimized the risks in such a way that there was no danger of fuel price increases. At the moment, with the [proposed] shortening of the deadlines, this risk is significantly increased," he said. "We would not be having this conversation if a proposal to end the derogation in three days had not been tabled in the National Assembly. If it had not been for this bill, there would also have been no danger of fuel price hikes and rumours of possible fuel shortages. All this is possible because someone does not care about these risks," Denkov said. 

Taking another question by the press, Denkov the Security Council's decisions were made on the basis of an expert discussion of the risks and there were no political considerations. "If there were any, we would have sought a deadline for lifting the Lukoil exemption during the term in office of Maria Gabriel [as Prime Minister] and March 1 is still in the term of the current government," he said. 

He said the discussion during today's Council was expert. If someone is looking for political appearances, one of the ways is to leave this meeting angry, Denkov said when asked to comment on the premature departure from today's meeting by the representatives of GERB and DPS.

Asked to comment the early departure of GERB and MRF from the meeting of the Security Council, Denkov said: "It was an expert discussion and if anybody sought to make political statements, one way to do it was by leaving early and angry."