The Energy and Water Regulatory Commission approved gas price increase by 36.22 per cent to a record BGN 94.54 per MWh

The Energy and Water Regulatory Commission approved today the price increase of gas requested by Bulgargaz by 36.22 percent from October 1 to BGN 94.54 per MWh without prices for access, transmission, excise and VAT. This is clear from the decision of the energy regulator, taken after analysis of the current data submitted by the company. For comparison, the price of gas approved by the EWRC for September 1 was BGN 69.40 per MWh. Thus, the price of natural gas in our country reached record levels after 7 consecutive months of constant rise, which began in April.

The initial request of the gas company was for an increase of 16% - in the amount of BGN 80.28 / MWh (excluding prices for access, transmission, excise and VAT) and includes the component for the activity "public supply" and the component "liabilities to society." However, the application was submitted on September 10, and since then gas prices on international exchanges have doubled. For example, if 3 months ago the price of 35.92 euros per MWh seemed high, then on October 2 it reached 97.77 euros per MWh.

The jump is a shock, as compared to October last year the increase reached 282 percent. In the first half of the year, the average rise was about 11 percent per month, but then the trend intensified.

Here is what the prices in the previous months look like: February - BGN 30.39 per MWh; March - BGN 28.64 per MWh; April - BGN 33.19 per MWh; May - BGN 37.71 per MWh; June - BGN 45.27 / MWh; July - BGN 49.94 per MWh; August - BGN 57.60 per MWh and September - BGN 69.40 per MWh - all without prices for access, transmission, excise and VAT.

The Energy and Water Regulatory Commission adopted a decision in connection with the application submitted by Bulgargaz EAD for approval of a price for October 2021, at which the public supplier will sell natural gas to the final suppliers and to the persons to whom a license has been issued for production and transmission of heat energy. The decision was made in accordance with the terms of the contract between Bulgargaz EAD and OOO Gazprom Export, the terms of the contract with the Azerbaijani company and the agreements to it, "the energy regulator said in a statement.

The Commission clarifies that the price of natural gas proposed by Bulgargaz EAD on 01.10.2021 has been accepted, updated with the market indices of the European gas hubs as of 30.09.2021 and the average monthly exchange rate for conversion of the euro into US dollars of the European Central Bank for September 2021. The updated price application of the public supplier also takes into account the quantities of natural gas under the exemption program, under the contracts with the licensees, as well as with customers at freely negotiated prices.

After analysis of the current data and documents submitted by Bulgargaz EAD and after calculations according to the price model, with the adopted decision EWRC approved the price of natural gas from October 1, 2021 in the amount of BGN 94.54 / MWh (excluding prices for access, transmission, excise and VAT).

The increased price of natural gas for October reflects the trend of continuing sharp rise in the prices of natural gas on the international gas markets. The data show that in September the prices of blue fuel in these markets increased by more than 50%. According to Bulgargaz EAD, the price that the company offers for the Bulgarian market is about 20% lower than the prices of European gas hubs, and since the beginning of 2021 until now consumers in Bulgaria have paid BGN 140 million less. compared to consumers in Europe, ”said the regulator.

It is also specified that the approved price of natural gas of BGN 94.54 / MWh includes the component price of natural gas at the entrance of the gas transmission networks, the component for the activity "public supply" under Art. 17, para. 7 of the NRCPG and the component for compensation of expenses 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.

The EWRC has the authority to approve the price of natural gas upon an application submitted by the public supplier. Based on the provided data and documents to the application and after checking the calculations, the Commission approves the price of natural gas for the month, which is applied from the first day of the month, according to Article 30, paragraph 1, item 7 of the Law on energy. In approving the price of natural gas, the EWRC takes into account the stated estimated quantities of natural gas imported from the domestic market, the terms of supply contracts, as well as the BNB average exchange rate of BGN against the foreign currency in which natural gas 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 the prices of natural gas and supply contracts, ”added the EWRC.

“In determining the expected delivery prices in connection with the formation of the entrance price of gas transmission networks, according to Art. 17, para. 3 of the NRCPG take into account the total amount of natural gas planned for delivery in October 2021 and the relative share of the quantities for public supply of natural gas, the natural gas release program, as well as the bilateral agreements, ” concluded the regulatory commission.