Financial and business news from Bulgaria

Cheaper heating from April, Bulgargaz offers EWRC the reduction to be...

Bulgargaz offers EWRC to confirm in April the price of natural gas to be cheaper by 40% or by 17.83 BGN. /mWh.
In accordance with the requirements of Ordinance No 2/2013 for Regulation of Gas Prices, Bulgargaz EAD, a subsidiary of Bulgarian Energy Holding EAD, proposed to EWRC to confirm the price of natural gas for April 2020, in the amount of BGN 26.21. /MWh (excluding access, transmission, excise duty and VAT prices) for final suppliers of natural gas and for a person to whom a licence for the production and transfer of heat energy (ZE, Art. 30, para. 1, item 7).

Compared to the approved price for the first quarter of 2020 (excluding prices for access, transmission, excise duty and VAT), the price offered by Bulgargaz EAD for April 2020 is lower by 40.49% or by 17.83 BGN. /mWh.

The price reduction is due to the successful negotiations of Bulgargaz EAD with OOO Gazprom export for renegotiation of the pricing mechanism for the supply price of natural gas to Bulgaria.

On 02.03.2020 Bulgargaz EAD and Gazprom export OOO signed an Supplement to the Natural Gas Supply Treaty, which agreed the new mechanism for pricing the supply price according to a hybrid formula, including oil component and hub indexation, which is predominant in the formula.

The negotiations between the two companies for a price review took place under the terms of the “price review mechanism” set out in the Commitments made by OOEO Gazprom export before the European Commission in case AT.39816 - Above gas supply in Central and Eastern Europe.

The Supplement enters into force as of 01.03.2020 and pricing will be on a monthly basis.

According to the Supplement and Commitments made by OOOO Gazprom export to the European Commission, the new pricing formula is applied retroactively as of 05.08.2019 - the date Bulgargaz EAD sent the request for a review of the gas price to OOO Gazprom export.

Implementation of the new price mechanism will lead to differences in delivery prices by months for the period 05.08.2019 — 29.02.2020, as well as to the formation of an amount for this period, which OOOO Gazprom export will refund to Bulgargaz EAD.

Bulgargaz EAD took the appropriate actions before EWRC in order to regulate and settle the relations between the Public Supplier and its customers for the period until 31.03.2020 in connection with the signed with OOOO Gazprom export Supplement to the Natural Gas Supply Contract.