Bulgaria's Energy Minister Hints at Gas Price Hike from July

Energy and Economy Minister Delyan Dobrev has suggested that gas rates are very likely to increase from July. Photo by BGNES

The price of natural gas sold by state-owned supplier Bulgargaz will probably increase from July, according to Delyan Dobrev, Bulgaria's Minister of Economy, Energy and Tourism.

Speaking Monday, he explained that the forthcoming price hike with the US dollar exchange rates and the prices of oil derivatives.

Dobrev did not specify the extent of the price increase.

"You know that the price of gas is determined on the basis of prices of oil derivatives for the past nine months and the value of the US dollar. During this nine-month period, the US dollar was on the rise. There was also an increase in average prices of oil derivatives, which rather spells an upward trend for prices of natural gas. The exact amount of the increase will be announced by (Bulgargaz CEO) Gogov," Dobrev noted.

Later on Monday, the State Commission for Energy and Water Regulation (DKEVR) will summon a meeting of a consultative council to discuss the gas rates.

The meeting is expected to shed light on the gas price increase that will be requested by Bulgargaz.

The amount of the gas price hike will most probably not include the 11% discount that was supposed to enter into force on April 1 because the agreement with the Russian side has not been signed due to new clauses related to the implementation of the South Stream gas pipeline.

"There are open questions about South Stream that have not been settled among the shareholders in South Stream Bulgaria. The issues have to be settled before we make a solid commitment to make the final investment decision by November 15, 2012. As soon as we settle these open questions and we sign the commitment, we shall get the 11.1% discount calculated retroactively from April 1. The price reduction amounts to some USD 115-120 M. What I mean to say is that we shall sign the additional agreements for the discount when we have achieved clarity on the open questions surrounding the project," Dobrev stated.

Speaking at a conference devoted to green energy, he stressed that Bulgaria could achieve its renewable energy target as early as in 2013, instead of 2020.

Dobrev pointed out, however, that Bulgaria had to try to slow down the process because if the quota was achieved in 2013, the sector would be deprived of investments for the next 7 years.

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