Head of energy watchdog: “Bulgargaz” bought Russian gas through an intermediary and resold it to us by 20 euros more expensive

My return to the EWRC was unexpected for me and was due to the insufficient legal competence of the team of the then ruling coalition, which made a gross mistake because during the pending procedure for the election of the chairman they changed the Energy Act, the recently reinstated chairman of the energy watchdog, Ivan Ivanov, told BNT on August 3.

"I stated to the MPs that I can return only on one categorical condition - if there is a decision of the Parliament. I came back with a sense of duty and responsibility as chairman of the EWRC," he was adamant.

The energy sector both at home and in the EU is experiencing extreme difficulties and the dominant fact is the Russian aggression in Ukraine, Ivanov said. The EWRC is only one of the institutions that have a bearing on energy and prices, and it has limited powers specifically over natural gas because it does not set but only approves prices. From the words of the chairman of the watchdog, it became clear that the regulator is likely to approve a gas price for August close to the one proposed by Bulgargaz.

"At a price of almost 300 BGN/MWh, we are starting to look for a regulatory change that would guarantee the performance of the functions of the public supplier Bulgargaz to the regulated market - the district heating and gas distribution companies. For them, the supply should definitely be based on the principle of minimum cost," he said.

A record gas price increase in August was demanded by Bulgargaz.

Ivanov said that Bulgargaz bought Russian gas through an intermediary and resold it to us by 20 euros more expensive, which can be proved with documents. In his words, this is the explanation how the company has accumulated a loss of BGN 500 million in 3-4 months.

"This question is not answered by Bulgargaz, the energy minister or the government. Instead of arranging to buy capacity as early as after March 31, to go to the exchange - there is a licence issued by the EWRC to trade natural gas - instead of buying volumes, Bulgargaz did nothing and it became necessary to resell to Bulgargaz through other traders, which greatly increased the price in the country."

For now, the price of heat set on July 1 remains unchanged, but if there is a dramatic change in the price of the components and natural gas, there could be an update on January 1 next year.

"A big problem is the linkage of district heating to natural gas. "Sofia district heating uses almost 30% - almost 1/3 of all natural gas entering the country. At the same time, the estimated annual price of natural gas for last month was 120 BGN/MWh, and you can see that the decision we will take for August is almost 300 BGN," said Ivan Ivanov.

According to him, Bulgargaz and the government should have started talks on signing a long-term contract for natural gas supplies as early as March 31, after Vladimir Putin issued a decree on payments in rubles. He stressed that the Komotini-Stara Zagora interconnector should be put into operation as soon as possible.

"Act 14 has been signed, acts 15 and 16 are to be signed. The prices there are extremely attractive for Bulgaria, much lower than the spot market, including the prices of LNG. If this happens, the Bulgarian citizens will feel the price reduction already in October," Ivanov said.

The other important thing for our country is the completion of the Alexandroupolis terminal by the end of 2023 - as Bulgaria participates in it with 20%.

"Then it will not be said, as now, that there are no slots where the tankers can be unloaded, and Bulgaria will have guaranteed supplies precisely on the basis of this terminal with regasification."

Domestic electricity prices will remain at their current levels until June 30 next year. People should be calm about electricity prices, as Bulgaria not only generates electricity, but is also one of the biggest exporters in the region, Ivan Ivanov said. For businesses, however, the price on the exchange is at record levels.

"Just a week ago the price was BGN 912/MWh, the compensation principle is in effect for it. However, this is a double-edged weapon. At a time when there is a shortage of energy resources, with this compensation, the business is largely discouraged from seeking a solution for the energy efficiency, because it knows that it will be compensated," the chairman of the energy regulator clarified.

According to him, there should be a fair distribution of electricity compensation for businesses.

Petkov: The caretaker government should provide the infrastructure for gas supplies from the 7 cargo ships

The EWRC has not yet received documents for the 7 LNG cargo ships contracted by Kiril Petkov's government, Ivan Ivanov said. According to him, the tankers are the lighter side of the supplies, and the EWRC will ask for an urgent meeting with the caretaker energy minister as early as today, as the gas problem is the most important issue.