The Energy and Water Regulatory Commission approved a rise in natural gas prices for March by 3.5% to BGN 113.73 / mWh

The Energy and Water Regulatory Commission adopted a decision in connection with the application submitted by Bulgargaz EAD for approval of a price for March 2022, at which the public supplier will sell natural gas to final suppliers and to persons licensed for production and transmission of heat energy. The decision was made in accordance with the terms of the contract between Bulgargaz EAD and Gazprom Export LLC, the terms of the contract with the Azerbaijani company and the agreements to it.

After analyzing the current data and documents submitted by Bulgargaz EAD and after making calculations according to the price model, with the adopted decision EWRC approved the price of natural gas, as of March 1, 2022, in the amount of BGN 113.73 / MWh (excluding prices for access, transmission, excise and VAT). The approved price is 3.5% higher than the price for February.

The main reasons for the increase in the price of natural gas are the limitation of the quantities extracted from the Chiren UGS, as well as the record high prices on the European gas exchanges. The extraction from "Chiren" has been suspended and by order of the Minister of Energy the facility has gone into injection mode. The purpose of this measure is to accumulate reserves in the event of a crisis in the supply of natural gas.

The Commission's decision takes into account the current data on the market indices of European gas hubs as of 28.02.2022, the indices of oil derivatives and the average monthly exchange rate for conversion of the euro into US dollars, contained in the updated price statement of Bulgargaz EAD from March 1, 2022. The quantities of natural gas under the exemption program, under the contracts with the licensees, as well as with customers at freely negotiated prices are also taken into account.

The approved price of natural gas of BGN 113.73 / 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.

At the open meeting held on March 4, 2022, EWRC Chairman Stanislav Todorov said that the main task of the Commission is to use all possible regulatory mechanisms to achieve the best prices for end users and especially for household consumers. The head of the regulator called on Bulgargaz to differentiate its responsibilities as a public supplier and gas trader. "Businesses have alternatives to conclude contracts with other suppliers, but for household consumers the source of natural gas is only Bulgargaz as a public supplier. Therefore, the energy regulator will be a guarantee that the rights of these consumers are respected and they receive the best possible price, "said the Chairman of the EWRC. The energy regulator will approve any contract or change in the contracts that Bulgargaz concludes, because they affect the price of gas for consumers. In each price application Bulgargaz must provide an analysis of possible alternative sources of natural gas, their prices and evidence that the company has sought the cheapest possible gas for consumers. The company must also use the opportunities to conclude short-term, medium-term and even long-term contracts with which to diversify the sources of natural gas and to achieve the most favorable price for household.

The decision of the EWRC for approval of the price of natural gas from 01.03.2022 is expected to be published on the website of the regulator.