Bulgarian Parliament Moves to Scrap Russian Gas Tax And Terminates Russian Oil Derogation Amid Opposition Turmoil

In a tumultuous parliamentary session marked by opposition discord, lawmakers aligned with the government advanced two pivotal energy-related changes in their initial reading. Despite disruptions, the vote successfully repealed the supplementary fee for transporting Russian gas through Bulgaria. Additionally, an amendment hastening the termination of the derogation for Russian oil imports, primarily advantageous to the Lukoil Neftohim refinery, was introduced.

These alterations were introduced within the Law on Control of Implementation of Restrictive Measures due to Russia's war in Ukraine.

Without debate and with 144 "yes" votes, the parliament introduced a ban on the export of fuels produced from Russian oil from January 1st, and from March 1st Lukoil's work with Russian oil is suspended. Thus, Bulgaria prematurely terminates the import derogation approved by the European Commission.

The deputies also decided to drop the commercial fee of BGN 20 per megawatt hour on the import and transit of Russian natural gas. The fee was dropped after Hungary threatened to veto Bulgaria for Schengen.

With 143 votes, the parliament decided to increase the capital of the Kozloduy NPP by BGN 1.5 billion in order to build the 7th and 8th units using AR1000 technology.

MPs had to deliver reports on bill amendments from their seats after opposition representatives blocked access to the podium. The session was rife with tension, particularly between the DPS and "Vazrazhdane" representatives.

The initiation of the process to eliminate the tax on Russian gas holds significant implications, notably following Hungary's recent announcement on December 16, opposing Bulgaria's Schengen entry unless the imposed additional tax on Russian gas import and transfer is lifted.

The fee, implemented on October 13 via changes in the Law on Sanctions against Russia, has not yielded any proceeds. Initially, it was intended to be collected from "Gazprom" through the operator "Bulgartransgaz," with contributions expected for the national budget. However, as of November 23, Vladimir Malinov, the executive director of the gas operator, disclosed that approximately BGN 260 million, slated for payment, remains uncollected.

Changes in legislation mandated that the fee should be gathered by customs, yet mechanisms for compelling Gazprom's payment were unspecified in both instances. Prime Minister Nikolai Denkov recently indicated that the obligations placed on "Bulgartransgaz" would be structured to prevent financial encumbrances.

President Rumen Radev countered this by appealing to the Constitutional Court, seeking the annulment of the provisions that established the fee, citing their potential unconstitutionality.

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