Lukoil Strikes Back at Bulgarian Rightist Leader

Energy | March 1, 2012, Thursday // 16:42|  views

Valentin Zlatev, CEO of Lukoil Bulgaria. Photo by BGNES

Fuel distributor Lukoil Bulgaria has risen against accusations of monopoly abuse voiced by former Prime Minister and rightist leader Ivan Kostov.

"Lukoil Bulgaria strongly objects to the ongoing practice of Ivan Kostov, leader of Democrats for a Strong Bulgaria (DSB), of using his immunity as an MP to launch public attacks and level false accusations at the company," Lukoil Bulgaria said in a statement on Thursday, commenting on Kostov's Wednesday remarks in Parliament.

"The leader of DSB uses every moment of destabilization of oil markets and a global price spike to come up with populist "ant-monopoly" slogans and to portray Lukoil as the convenient enemy to a society plagued by low income, Lukoil writes

"For 10 years the entire country had to suffer the consequences of widespread fuel smuggling which flourished precisely during Ivan Kostov's term in office without him uttering a word of protection for the legal participants on the market, be they small, middle-sized, or large companies. For the past two years, however, ever since measures to control the fuel market were introduced, the leader of DSB has been using each period of oil market destabilization and global price spikes to come up with populist "ant-monopoly" slogans and to portray Lukoil as the convenient enemy to a society deeply plagued by low incomes," the fuel retailer notes, claiming that Kostov's statement in Parliament was a pack of lies.

"It is not true that Lukoil failed to install measuring devices enabling the monitoring of liquid fuel flows. Both the Lukoil Neftochim refinery and the warehouses and retail and wholesale fuel sites owned by Lukoil Bulgaria have been equipped with all the necessary devices allowing control of fuel flows in the country. This is a fact which has been duly certified by the Customs Agency and the National Revenue Agency (NRA)," Lukoil argues.

The company rejects Kostov's suggestions that fuel prices in Bulgaria are higher than in France due to "Lukoil's monopoly".

"A check at the Europe's Energy Portal shows how much fuel costs in France – EUR 1.627 per liter of gasoline and EUR 1.423 per liter of diesel. Kostov's preoccupation with "anti-monopoly concerns" makes him forget all too easily that it was precisely his Cabinet which signed the privatization contract for the Neftochim refinery in Burgas and thereby guaranteed the protection of the interests of the state and the market with his signature. The terms of the contract have never been changed," the company says.

"It is not true that Lukoil "has imposed a monopoly over the entire (or almost 80% of) the liquid fuels storage base". According to expert data, there are over 1.5 million cubic meters of fuel warehousing volume apart from the reservoirs of the Burgas-based plant. Lukoil Bulgaria owns 400 000 cubic meters, or ?, of this volume," Lukoil insists.

"There are no bans or restrictions about building or maintaining fuel warehouses in Bulgaria, as long as the facilities meet the legal requirements, which are aimed at restricting the grey economy in the sphere of petroleum products trading," the fuel distributor stresses.

"The campaign Kostov is leading, using Lukoil as the object of his attacks is actually a campaign against this type of control. Under the guise of calls for "liberalization", attempts are being made to erode the efforts of the state for uncovering smuggling channels and to cross out the investments made by legally operating distributors, importers and traders of fuel for the implementation of state orders".

Lukoil vows to initiate consultations with all organizations which unite "legal and serious business in Bulgaria" for drafting measures that could offer "some sort of protection for any company whose name and public image fall prey to such political racketeering".

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Tags: Lukoil Bulgaria, Lukoil Neftochim, refinery, Ivan Kostov, monopoly, privatizaiton, Democrats for Strong Bulgaria, right-wing, fuel prices, fuel retailer

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