Bulgarian Fuel Experts Rule Out Rocket High Gasoline Prices

Andrey Delchev, Chair of the Bulgarian Petroleum and Gas Association (BPGA), has sided with the opinion that a retail price of gasoline of BGN 7 per liter is exaggerated. Photo by BGNES

Valentin Kanev, Chair of the Balkan and Black Sea Petroleum and Gas Association, has termed forecasts about growing gasoline prices as exaggerated.

In a Tuesday interview for the Bulgarian National Radio (BNR), he remained evasive abut the gas fields mentioned by Prime Minister Boyko Borisov one day earlier in a TV statement.

Kanev suggested that there was a period of additional research.

"In Bulgaria we are trying to find a huge oil and gas field but without much success, unfortunately. But there have always been perspectives," the Chair of the BBSPA commented.

The expert predicted that oil prices on international markets would stabilize.

"What now causes prices to go up is the suspension of a major portion of the output and the political tensions in the Persian Gulf, in Iran and in some other places like Sudan. At the same time, there are also positive factors at play like the increasing output from Libya, the return to pre-war levels, and in Iraq too. Russia and Saudi Arabia are also increasing output, meaning that prices can remain stable now and in the future they are quite likely to drop," Kanev stated.

In a Tuesday interview for private TV channel bTV, Andrey Delchev, Chair of the Bulgarian Petroleum and Gas Association (BPGA), argued that a price of BGN 7 per liter of gasoline, as suggested by PM Borisov, was unrealistic.

The BPGA Chair claimed that if crude oil prices climbed to USD 150 per barrel from their current levels of USD 120-130, retail gasoline prices would reach BGN 3 per liter at most.

He said that such a scenario was possible in the case of military action against Iran and a blockade of the Strait of Hormuz, where some 40% of world's crude oil supplies pass through.

Delchev attributed the growing crude oil prices to fears that a war in the Persian Gulf could result in ousting a major player like the Islamic Republic from the market.

He added that under such a scenario, Iran was also expected to try to mine the Strait of Hormuz.

The BPGA Chair noted that an increase by another 20% in fuel prices in Bulgaria would seriously damage the purchasing power of the population.

Meanwhile, Industry Watch economist Georgi Stoev reminded that as much as 44% of the price of gasoline was excise duty, meaning that gasoline price spikes were not proportional to crude oil spikes.

He illustrated his point by saying that a 30% increase in crude oil prices was expected to cause a 20% spike in fuel prices.

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