18% Gas Price Increase Is Unjustified - Bulgarian Energy Watchdog Chair

DKEVR Chair Angel Semerdzhiev has said that the 18% gas price hike demanded by Bulgargaz is unreasonable. Photo by BGNES

The State Commission for Energy and Water Regulation (DKEVR) has opposed the request of state-owned Bulgargaz for a 18% gas price hike from January 2012, saying that it is unreasonably high.

In a Tuesday statement, DKEVR Chair Angel Semerdzhiev explained that the energy watchdog had started analyzing the data presented by the state-owned gas supplier but had so far found no justification for the sought-after price increase.

At the end of last week, Bulgargaz demanded a 17.74% increase in prices of natural gas from January 2012 to the tune of BGN 699.82 per 1000 cu m, VAT excluded.

The state-owned gas supplier attributed the proposed Q1 2012 price spike to the fact that the energy watchdog had kept tariffs artificially low during previous periods and to the higher USD-BGN exchange rate.

Semerdzhiev argued, however, that there were two factors which could trim down the price proposal - the fact that the projected uncollected revenues of Bulgargaz could shrink by the end of Q4 and the fact that the company had deployed an exaggerated increase in the cost of domestically extracted gas.

Asked if the Q1 2012 gas price increase would push heating rates up, he said that the issue would become clear in a week.

The DKEVR Chair added that one way to optimize the mix of supplies was to increase the quantities supplied from the Chiren gas storage.

Over the past few years, it has become common practice for DKEVR to scale down Bulgargaz' proposals for substantial gas price hikes.

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