Bulgaria Buisness Snubs Shock Electricity Price Spike

Energy | July 9, 2012, Monday // 16:58|  views

Heavy industry executives have cautioned about the deep impact of the 16% spike in power rates in Bulgaria. Photo by Sofia Photo Agency

The latest 16% spike in electricity prices for large-scale heavy industry consumers in Bulgaria will be critical for companies which have already reduced their costs to a bare minimum after the long-lasting recession, according to executives in the sphere.

Representatives of the machine-building and chemical industries voiced their worries Monday, joining efforts with the Bulgarian Industrial Association (BIA) to stir up a discussion with the government on an adequate policy for at least partially offsetting the negative impact of the energy price in July.

"Since 2005, prices of natural gas in Bulgaria have tripled, electricity prices have doubled, while the prices of the machines we produce have dropped by 25-30%," Lyudmil Alexandrov, CEO of Radomir-based company Radomir Metal Industries.

Although the company is export-oriented, it has been operating at a loss since 2011 due to the continuing recession in Europe.

"We have depleted all internal options for cutting costs like staff cuts and boosting energy efficiency. We are eagerly looking for new markets, but demand fell yet again in the last two months and it is difficult to say how long we can keep this up," Alexandrov told business news portal investor.bg.

According to Ilia Keleshev, Chair of the Bulgarian Branch Chamber of Machine Building, many companies in the sphere are in the same predicament and have long been calling for a government strategy on fuel prices.

Bulgaria's business sector has repeatedly suggested alternative scenarios for the introduction of the renewable energy surcharge in electricity tariffs, suggesting that it should be at least partially compensated by the state, as is the case  in a number of other EU countries.

Talks on the matter government have failed to yield results, with the Cabinet saying that any budget assistance for the business sector at this stage could be interpreted as state aid by the EU.

In the past three years, companies from different sectors of the economy have reiterated calls for a moratorium on energy price spikes, the sole achievement being a reduction of the electricity price increase resulting from the renewable energy surcharge.

Bulgaria's Energy and Economy Minister Delyan Dobrev announced recently that July 1 would have brought a 30% hike in electricity tariffs if the government had failed to block the connection of more photovoltaic panels into the grid.

The BIA and the Bulgarian Branch Chamber of Machine Building keep insisting on an active dialogue with the government and expect a response to a set of measures they proposed to counter the deepening recession in the country.

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Tags: Bulgarian Industrial Association, BIA, electricity prices, renewable energy, Economy and Energy Minister, Delyan Dobrev, Radomir Metal Industries, fuel prices, Bulgarian Branch Chamber - Machine Building, machine building, chemical industry


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