In the field of scandals, the deputies decided: The derogation for "Lukoil" is dropped, the energy contributions for the transit of Russian gas are abolished

In an unusual situation, where the parliamentary rostrum was blocked by the opposition, and the people's representatives presented their proposals for the adoption of bills from the floor, the deputies of the National Assembly accepted the termination of the derogation of "Lukoil" and the abolition of the energy contribution for the transit of Russian natural gas.

Both decisions are referred to in Draft Laws on Amendments and Additions to the Law on Control of the Implementation of Restrictive Measures in View of Russia's Actions Destabilizing the Situation in Ukraine.

Removal of energy contributions for the transit of Russian natural gas

In practice, the deputies confirmed the decision of the energy committee of December 13, 2023. The report on the subject states that the amendment to the law specifies some of the provisions, including the obligees regarding the payment of the energy contribution. Currently, energy contributions are owed by the users of the gas transmission network, who are importers within the meaning of the customs legislation or for whom the operators of the gas transmission networks carry out the transmission of natural gas for transit originating in Russia. The operator of the gas transmission network is obliged to provide the "Customs" Agency with information regarding the import of natural gas and the transfer of natural gas for transit by user, according to the report of the Energy Commission. According to him, "the law lacks regulation regarding the manner in which the origin of the imported and transited natural gas will be established by the customs authorities, insofar as the legal requirement for the origin of the gas from Russia is an absolute cumulative prerequisite for the obligation of contributions / together with the requirement for the presence of CN codes 2711 11 00 and 2711 21 00/. In this regard, it is necessary to find a common European decision regarding the determination of the origin of natural gas from Russia".

The report recalls that the European regulations on this matter "do not provide for the imposition of additional fees on the transit of natural gas under existing contracts.

In view of the above, it is proposed that the energy contributions that are due for the import and transfer of natural gas for transit originating in Russia with the above-mentioned codes should be waived until the introduction of an explicit regulation regarding the determination of the origin of natural gas by EU law.

Derogation for Russian oil (Lukoil)

According to the report presented by the chairman of the energy committee, Delyan Dobrev, "in the reasons for the draft law, it is stated that in connection with the implementation of restrictive measures in view of the actions of Russia, destabilizing the situation in Ukraine, it was established that the exclusion from the European oil embargo and the adopted legislative changes at the beginning of 2023 did not lead to a smooth and gradual transition of "Lukoil Neftohim Burgas" to alternative suppliers of crude oil other than Russian. The derogation has not significantly lowered fuel prices in the country," the report states. At the same time, it is reported that "at the same time, a shock to the fuel market in the country was avoided."

The report claims that our country can get crude oil and other raw materials from non-Russian sources, as well as refined products. "Russian control over the Bulgarian oil and fuel market has helped to establish networks of influence in Bulgarian politics and economy, which have interfered in strategic decisions for the country. These malicious practices will never be solved without diversification of crude oil supplies and strict enforcement of open infrastructure access rules,” the Energy Commission report stated. According to him, the first step was taken with the termination of the concession contract for the terminal in Rosenets.

Ending the derogation for exports from January 1, 2024 to third countries and ending crude oil imports from March 1 will deprive Lukoil, and thereby the Kremlin, of additional profits to finance its military efforts in Ukraine. The Energy Commission report also states that "according to analysts' estimates, Lukoil's business operations in Bulgaria have provided about $3 billion in profit for Lukoil" since the beginning of the Russian invasion, formed by the discount of about $20 per barrel of grade Urals, as well as about 4% of total revenues in the Russian oil budget in 2023.

In the first nine months of 2023 alone, the Burgas refinery processed 4.5 million tons of Russian crude oil," the report states.

It is recalled that the "Customs" Agency is to carry out an inventory of the warehouses with an inventory of the available fuels and crude oil as of December 31 of this year, and the fuels that cannot be sold on the Bulgarian market are to be exported accordingly.

As is known, the drop in energy contributions for the transit of Russian gas caused confusion at national and international level. The initial version of the law on energy contributions formed a financial obligation of BGN 272 million for Bulgartransgaz. A way to write off these liabilities from the gas company is currently being sought.

At the international level, Hungary reacted most sharply, threatening to block Bulgaria's Schengen membership if it does not remove energy taxes. Relations with Serbia were also strained, literally days before the intersystem gas connection - the IBS gas pipeline - was put into operation. In addition, the European Union at this stage has no prohibitive measures on the import of Russian natural gas.

As for the derogation for Lukoil, experts, who wished to remain anonymous, recall that the actions of the National Assembly do not end concerns about the fuel market in Bulgaria. Their concerns are related to the fact that in "Neftohim Burgas" the expert staff who can continue the work in the refinery when the Russian company withdraws will not be able to cope. They remind that even the average expert staff in the refinery are not Bulgarian specialists. Concerns remain about imports from other sources, given the complicated geopolitical situation. The fuel market is at risk in terms of prices. There is also a problem with fuel stocks, which are also of Russian origin. How in this case the dropping of the derogation will be commented on at this stage remains unclear.

Political experts believe that the decisions of the National Assembly in this unusual situation raise doubts about legitimacy.