Who and how much will pay the Bulgarian gas tax – Heavy blow for businesses – households

Who and how much will pay the Bulgarian gas tax – Heavy blow for businesses – households
Who and how much will pay the Bulgarian gas tax – Heavy blow for businesses – households

By Haris Fludopoulos

Extraordinary increases in the price of natural gas are just around the corner as a result of Bulgaria’s decision to impose an extraordinary levy of €10/MWh on imports of Russian natural gas passing through Bulgarian territory. Although officially the Bulgarian government claims that the fee will be borne by the Russian Gazprom and not its customers, nevertheless the most likely scenario is that the total loss of 2 billion euros per year (not only for Greece but also for the rest of the countries that supply Russian gas through Bulgaria such as Serbia, North Macedonia and Hungary) will not be paid by the Russian company but will be passed on to its customers. There are essentially two scenarios in relation to the extraordinary fee: the first is that Gazprom will pass on the extra cost to its customers, which in the case of Greece means that the final price of natural gas together with taxes and fees will increase not 10 but around 20 euros/MWh. The second scenario is that Gazprom refuses to pay the fee, in which case Bulgaria is expected to cut off the flow of Russian natural gas, with a direct impact on the international gas TTF price, in which case there is also expected to be an increase that will burden the natural gas market as a whole.

For our country, the total cost entailed by the imposition of the fee by Bulgaria on Russian natural gas is estimated to reach 360 million euros on an annual basis.

Who does it concern? Currently, DEPA, Mytilineos, PPC and the Kopelouzou Group import Russian natural gas through Bulgaria. It is noted that for DEPA, according to information, there is no expected impact since there is a relevant provision in the supply contract that provides that the price is not affected by any taxes or fees outside the Greek territory. However, DEPA’s contract is considered the most “expensive” compared to the gas imported by other companies and which has more competitive pricing. In other words, essentially the Bulgarian fee will “hit” the cheapest imports that are directed to the Greek market with what this implies for the cost of fuel and not only since natural gas also affects the price of electricity.

It is clear that the impact of the extraordinary taxation will be heavy, as a large part of the Greek market will be negatively affected. It is noted that natural gas is a key fuel for power generation, while it is also used by industry, which means that a possible increase in costs affects the international competitiveness of Greek businesses, especially export ones. In any case, the natural gas imported from Russia corresponds to approximately 20% of the country’s total needs. The distortions that will be created are expected to affect the market as a whole, reaching even the electricity and natural gas bills of the final consumers.

And while Bulgaria’s move clearly contradicts EU law and EU treaties, the fact that officially the Greek government maintains a rather neutral stance and has not moved in international forums to reverse this unfavorable development is surprising. Recently, in fact, the competent minister of environment and energy, Th. Skylakakis, invoked the fact that DEPA and Gazprom are in negotiations for the renewal of the supply contract in order to justify the inaction of the Greek side.

However, it is clear that Bulgaria’s decision, under the guise of sanctioning Russian gas, contradicts the EU treaties. First of all, it should be noted that there are currently no EU sanctions. for Russian natural gas. And if there was some kind of sanction, then the revenue from any levy would be directed to the European balance sheet and not to the budget of a member state as is the case with the Bulgarian levy. In any case, it is not allowed under the European treaties to impose a fee on a company from a third country, while the European Union relies on the treaty on coal and steel by which the member states granted the Union the right to impose such fees.

Finally, it is worth mentioning that according to a recent analysis by S&P Global Commodity Insights, the critical date after which there will be tangible results from the law, with a possible consequence even the interruption of the flow of Russian gas to our country, is November 10. i.e. tomorrow.

Read more:

* Effervescence with the Bulgarian tax on natural gas – What it means for Greece

The article is in Greek

Tags: pay Bulgarian gas tax Heavy blow businesses households


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