site.btaUPDATED Socialist Leader and Economy Minister Urges Restoring Dialogue with Gazprom over Gas Supplies Cutoff

Socialist leader and Deputy Prime Minister and Economy Minister Kornelia Ninova Thursday said employers want the government "to make it possible to resume talks with Gazprom" after it cut off gas supplies to Bulgaria. Ninova was speaking to the press after a meeting with employer organizations in Sofia.

After the suspension of Russian gas supplies as of April 27 over Bulgaria's refusal to pay in rubles, the Energy Minister and the Prime Minister in the government where Ninova is Economy and Industry Minister were adamant that Bulgaria is not going to accept Gazprom's unilateral change of terms in the gas supply agreement and not going to give in to the Russian pressure.

Ninova said Thursday that "we propose that by then gas prices should be frozen or capped at their level in the contract with Gazprom and the difference with the higher prices of alternative supplies be paid for by the State."  

Other proposals from the meeting include adoption of a bill be urgently adopted for additional taxing of excessive profit of energy companies and continuing the compensations to business for the high electricity prices until new contracts provide a long-term solution to the problems, said the Economy Minister.

The head of the Association of Industrial Capital in Bulgaria, Vassil Velev, said that the energy sector generates excessive profit of such proportions that only a part of it can compensate all consumers on the free market. For example, the energy companies can keep 25% of the excessive profit and 75% can go for compensations. Velev said that the scheme is self-financing and no taxpayers’ money need to be spent. 

He argued that Europe will continue to use Russian gas and it better get it from the producer than from middlemen with a 30-40% markup. He said that employers have agreed to demand state compensation for any markup that middlemen will charge.

Ninova said that even if the government finds alternative gas sources and routes, this gas will be more expensive, possibly by 30-40%, and neither households not the industry can take such a blow without compensation mechanisms.

Taking a reporter’s question, the Economy Minister expressed optimism that the parties in the government coalition will agree on the proposed compensations and other proposals. 

She also touched upon the controversial question of whether or not Bulgaria should send military aid to Ukraine (to which her Socialist party is strongly opposed): “Most of all, we have to be honest with Bulgarian people and tell them that it is in the national interest to have peace rather than get involved in a war in the way that some people understand it: through arms supplies. We want a peaceful solution to the problem and recovery in Europe and the world.”

The key users of natural gas are the companies in the chemical and energy industries, with total consumption of 1,633 million cubic meters, according to Economy and Industry Ministry figures. 

The structure of natural gas use in Bulgaria is as follow:

• 39.27% in energy industry;
• 37.9% in chemical industry;
• 8.11% glass and porcelain industry;
• 8.04% other industries;
• 5.04% in metallurgy;
• 1.64% in construction.

These sectors include 25,241 companies. According to 2018 figures, these companies generate 17% of the value added in Bulgaria and 23% of the total output. They employ 246,909 people or 11% of all employed Bulgarians.