A significant increase in natural gas and heat is being prepared from 1 July

At an open meeting, the Energy and Water Regulatory Commission in the specialized staff "Energy" discussed a report in connection with the submitted application of Bulgargaz EAD for approval of a price for July 2021, at which the public supplier will sell natural gas to final suppliers and to the persons to whom a license for production and transmission of heat energy has been issued. In accordance with the requirements for publicity and transparency of the institutions, the report was published in advance on the regulator's website.

 After an analysis prepared on the basis of the data and documents submitted by Bulgargaz EAD and after calculations made according to the price model, the EWRC report proposes that the price of natural gas from July 1, 2021 be BGN 46.88. / MWh (excluding prices for access, transmission, excise and VAT).

At the open meeting the Executive Director of Bulgargaz EAD Nikolay Pavlov agreed with the conclusions and findings in the report. He explained that after the submission of the application on 10.06.2021, the quotations of oil and oil products and the prices on the European gas markets continue to rise as a result of the increased demand for these fuels. From the data he presented, it became clear that for the last 6 months, international oil prices have risen by more than 50% and reached 75 US dollars / barrel. For the same period, the average price of natural gas increased by 70% - from 16 euros to over 28 euros / MWh. "Nevertheless, the price that Bulgargaz EAD will offer for July will be more than 10% lower than the prices on the European gas exchanges," said the company's executive director.

EWRC Chairman Assoc. Prof. Ivan Ivanov expressed the regulator's concern that the high rise in fuel prices will inevitably require a serious adjustment in the pricing decisions to be adopted by the Commission on July 1, 2021, both in terms of the price of natural gas and for heat prices. "The data on the sharp rise in gas and oil prices on international markets, as well as the price increase of carbon quotas, mean that the regulator is about to adopt decisions which from 1.07 envisage a serious increase in prices for natural gas consumers and heat. These are difficult and highly undesirable decisions by the Commission, as they will have a negative impact on consumers, and the regulator is fully aware of this. At the same time, the regulator has no choice but to take into account the impact of current quotations on the price elements of oil and natural gas on international markets, as Bulgaria receives them entirely from imports, "said the chairman of the regulator.

On July 1, 2021, Bulgargaz EAD will submit to the EWRC an updated application with reporting information as of June 30, 2021 for the prices of the market indices of European gas hubs, as well as information on the average monthly exchange rate for conversion of euro into US dollars for June 2021

The offer of the public supplier for the price of natural gas is in compliance with the terms of the trade contracts for supply with OOO Gazprom Export and the Azerbaijani company and the agreements to them. In connection with the formation of the price of input of gas transmission networks according to art. 17, para. 3 of NRCPG Bulgargaz EAD submitted to the application a reference for the total amount of natural gas for July 2021 and the relative share of the quantities for public supply of natural gas, under the natural gas release program, as well as under the bilateral contracts for natural gas supply.

The offered price includes the price of natural gas at the entrance of the gas transmission networks, the component under Art. 17, para. 7 of the NRCPG for the activity “public procurement, as well as the component under Art. 11a, para. 2 of the NRCPG, covering the costs of Bulgargaz EAD for storage of quantities in the underground gas storage Chiren in fulfillment of obligations under the Emergency Action Plan.

In approving the price of natural gas, the EWRC shall take into account the stated estimated quantities of natural gas from imports for the domestic market, the changed terms of the supply contract between Bulgargaz EAD and OOO Gazprom Export, the terms of the supply contract with the Azerbaijani company and its agreements. , as well as the average exchange rate of the BNB in ​​BGN against the foreign currency in which the natural gas imported into the country is paid. The powers of the Commission are only to establish whether the application of Bulgargaz EAD meets the requirements of Ordinance № 2 for regulation of natural gas prices and supply contracts with companies.

The decision to approve the price for July 2021, at which Bulgargaz EAD will sell natural gas to the final suppliers and to the persons to whom a license for production and transmission of heat has been issued, the Commission will take at a closed meeting on 01.07.2021.