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Bulgaria asks EU to authorize a tax exemption on electricity and gas

10 May 2022
Consumers
energynomics

Bulgaria, a country deeply affected by rising energy prices, will ask the European Commission this week to allow it to eliminate excise duties on electricity and natural gas in order to protect its economy, the Government in Sofia announced, according to Reuters.

More than 90% of Bulgaria’s natural gas is imported from Russia. Recently, Gazprom completely cut off gas supplies to Poland and Bulgaria in the absence of ruble payments from the two countries for fuel supplies.

Sofia has managed to secure alternative deliveries from Greece and has not cut deliveries to customers yet, but companies have expressed concern that the price of gas could be raised by 20% to 30%.

The cost of electricity in Bulgaria has been rising since last autumn, prompting the government to freeze prices for households and provide compensation to companies, according to Agerpres.

Following rising energy prices, inflation rose to 12.4% in March, the highest level since July 2008. This month, the authorities want to take steps to ease inflationary pressures.

“One of the measures will be a request for a derogation from the EU for the exemption from excise duty on electricity and natural gas,” the government said in a statement.

Bulgaria’s main business organizations, worried about the new rise in gas prices, have called on the executive to find ways to resume talks with Gazprom and extend compensation for rising energy prices.

In the field of transport, companies are threatening protests nationwide, urging authorities to halve excise duties on fuel and other measures to lower fuel prices.

EU sources told Reuters that Bulgaria has demanded exceptions from the planned EU embargo on Russian oil, as Lukoil Neftochim Burgas, the largest fuel supplier, processes Russian crude oil. But the EU has not offered concessions to Bulgaria, sources said.

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