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 24-09-2008 15:38
Bulgarian opposition party wants revision of gas deal with Russia
The right-wing opposition Democrats for a Strong Bulgaria (DSB)urged the Bulgarian government on Wednesday (September 17th) to push for a revision of the country's gas agreement with Russian gas giant Gazprom. "The cabinet should demand renegotiation" of the prices it agreed to in 2006, DSB leader and former prime minister Ivan Kostov said to private Nova TV. "The least it could do is demand a postponement of gas price increases." In 1998, Kostov's government signed two contracts with Gazprom -- one on direct gas deliveries and a gas-for-transit deal. The first contract set the price per 1,000cu. m of Russian natural gas at $260, while the second allowed Bulgaria to pay a discounted rate of $83 in exchange for Gazprom's shipping gas through Bulgarian pipelines to Greece, Turkey and Macedonia. The agreement, initially scheduled to expire in 2010, allowed Bulgarian gas monopoly Bulgargaz to keep domestic prices at about $180 per 1,000cu. m. Succumbing to Russian pressure, Bulgaria agreed to an early review of the contract in 2006, fearing a possible suspension of gas shipments through its territory. After months of negotiations, the two countries signed a new deal in December 2006, envisioning a gradual increase of gas prices at the rate of inflation. Earlier this year, Bulgaria's State Energy and Water Regulation Commission (SEWRC) approved a 5.16% hike of natural gas prices as of July 1st, well below the 19.6% Bulgargaz was seeking. Last week, the company asked the energy regulator to approve a new increase of nearly 37% onOctober 1st. That increase would come after gas rates in Bulgaria rose 39% during the 12 months ending in July 2008. SEWRC indicated it was unlikely to meet Bulgargaz's new demand, which representatives of heating companies in the country called "insane" and fatal to the energy sector if approved. Meanwhile, Bulgargaz briefly halted supplies to several municipal heating companies that owed money to it. They now have until September 19th to pay their debts. In turn, the firms are pressing private consumers to pay their bills to avoid being cut off in the wintertime. Experts are warning, however, that with gas bills already unaffordable for an increasing portion of the population, many might opt for electrical heat, which could plunge the country into an energy crisis. Kostov said there were several means Bulgaria could use to pressure Gazprom to review the gas contract. One would be to suspend its participation in projects that are of strategic importance for Russia, like the South Stream gas pipeline project and the Bourgas-Alexandroupolis oil pipeline. The Bulgarian government should demand a postponement of gas price increases to ensure the survival of the country's heating companies, he said. This content was commissioned for SETimes.com
Source: www.setimes.com
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