EWRC: The energy regulator is the one who will decide on the price of gas for April

The energy regulator is the one who will decide on the price of natural gas for April. This is stated in a statement of the Energy and Water Regulatory Commission (EWRC) to the media on the occasion of an earlier price application submitted by Bulgargaz for April, predicting an increase in the price of natural gas by 57.71%.

The regulator recalls the extreme prices of gas hubs, as well as the trend of normalization and recalls that the current announcement of the gas company by law is submitted 20 days before the decision of the regulator.

In connection with the price application submitted by Bulgargaz EAD, which proposes a price of natural gas for the regulated market for April 2022 in the amount of BGN 179.36 / MWh, the Energy and Water Regulatory Commission considers need to clarify the following:

The price of natural gas offered by Bulgargaz EAD for April 2022 reflects the values ​​of parameters reported as of the date of submission of the application, therefore the price offered in this way is entirely forecast. The decision of the EWRC to approve the price for April 2022 will take into account the change of these parameters by the last day of March, "said the EWRC.

The regulator reminds that the price application contains parameters at the time of submitting the application.

"The amendments in 2020 to the Energy Act in connection with the changed conditions of the natural gas supply contract with the main supplier of Bulgargaz EAD - OOO Gazprom Export provide for EWRC to approve the price of natural gas on a monthly basis. In this regard, Bulgargaz EAD is obliged to submit to the EWRC 20 days before the end of the current month an application for approval of the price of natural gas, which will be applied in the next calendar month. In view of this, on March 11, 2022, the public supplier submitted to the EWRC an application for approval of the price of natural gas for April 2022, in which it took into account market factors as of that date.

As a result of the military conflict in Ukraine and the sanctions imposed, on some days during the period March 1-10, 2022, the prices of gas exchanges reached extreme values ​​of 3900 dollars / 1000 cubic meters, which is nearly 350 euros per MWh. There is a tendency to normalize the markets and to date there has been a decrease in stock prices by nearly three times - today's quotes show prices of 1250 dollars / 1000 cubic meters or about 110 euros / MWh. The expectations of the energy regulator are that in the remaining days until the end of March the trend towards stabilization of international natural gas prices will continue.

In the decision to approve the price of natural gas for the regulated market, which will be taken in early April, the Commission will take into account the values ​​of international quotations as of March 31, 2022, and not just the extreme price levels at the beginning of March".

The regulator is adamant that the forthcoming decision will be taken as a result of a thorough analysis.

"EWRC has started an analysis of the extent to which the estimates in the application of Bulgargaz EAD are justified and whether it takes into account all possible reserves for price reduction, including through the maximum possible deliveries from the gas storage in Chiren. The public supplier is required to provide justification and evidence for each pricing element and analysis of the natural gas market.

EWRC reaffirms that in the current unfavorable situation at record high prices on international markets, it will fulfill its stated priorities to achieve the best possible prices for end users. To this end, in determining the price of natural gas, the Commission will apply all regulatory mechanisms at its disposal, "concluded the Regulatory Commission.