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Bulgaria raises gas prices by 24% from Oct 1

  Bulgaria will raise wholesale natural gas prices by 23.89% from Oct. 1 due to the global increase in energy costs this year, the state energy regulator said on Tuesday.

 

The regulator announced a lower increase in prices than initially planned after trade unions and employers warned of possible company bankruptcies and street protests in the poorest European Union nation. The increase in gas prices comes at a time Bulgaria is struggling with double-digit inflation, boosted by increasing incomes and high food prices.

Bulgaria’s state gas monopoly Bulgargaz, which buys most of its gas from Russia, had demanded a 36.5% rise in wholesale prices from October because of more expensive energy alternatives to gas and stronger US dollar. The company said the state energy regulator’s unwillingness to raise domestic gas prices to market levels had caused it losses of more than €30 million ($43.05 million) for January-August.

Consecutive governments, fearing public discontent, have kept power and gas prices artificially low, drawing criticism from utilities which say they cannot cover their expenses and invest in modernization and maintenance of the networks. Power and gas prices are a politically sensitive issue in most eastern European countries, which have yet to abolish a communist legacy of state control over household prices. Despite increases this year, prices in the region are still below those in western Europe.

Economy and Energy Minister Minister Petar Dimitrov and representatives of the regulator met business leaders and trade unions on Tuesday to discuss the price hike. Dimitrov said another increase of 21.4% from Jan. 1 was likely to make up for the fact that the price was now not raised higher up, the government said in a statement.

Businesses and trade unions have complained about lack of transparency and predictability in the regulator’s price decisions. Earlier this month Bulgargaz threatened to cut supplies to four regional heating utilities over unpaid debts. (Reuters)