site.btaUPDATED Government, Employers Agree on Compensations for May and Long-term Solutions through Legislative Changes

Prime Minister Kiril Petkov, Finance Minister Assen Vassilev and Energy Minister Alexander Nikolov met with representatives of employers' organizations and trade unions to discuss compensations over the high energy prices and inflation for May, as well as legislative proposals in the energy sector. Emerging from the meeting, Petkov said that they had constructive talks and that an agreement was reached about the compensations for May.

The Prime Minister's words were confirmed by Bulgarian Industrial Association Managing Board Chair Dobri Mitrev. Mitrev said that considering the measures the government plans for May and June, and the promise for long-term sustainable solution, businesses can have confidence about their operation.

Petkov said that Azeri gas will start flowing to Bulgaria in full volume from July 1, regardless of when the gas interconnector with Greece will be completed.

Short-term Measures

These include compensations for the electricity prices for the month of May equal to 80% of the increase over BGN 200/MWh, said the Prime Minister. There will be no price ceiling.

According to current data from the Bulgarian National Bank, this means that in May compensations for businesses will exceed BGN 160/MWh, which is more than what is currently paid.

Short-term Measures for Natural Gas Prices

The government has ensured supplies both for businesses and the public supplier. The price achieved in May was 14.3% higher than in April. In view of this, the government will apply the full amount of compensation for April plus 100% of the price increase in May. That is, the prices for both households and businesses will be the same as in April before Gazprom-Export cut off gas supplies to Bulgaria.

Long-term Measures through Legislative Proposals

The Prime Minister said that the government will work together with the employers and the unions to prepare a bill and submit it to Parliament in the coming weeks, so as to adopt a long-term mechanism for compensations and "spare us the monthly meetings", to use Petkov's words. "This way all businesses can plan their energy costs," he added.

The government press service said in its press release before the meeting that the plan is to automate the process of compensating businesses for high electricity prices through legal changes to finance the Electricity System Security Fund and charging the excess profits of energy companies in the structure of the Bulgarian Energy Holding.

If necessary and in case of continuing difficulties with the supply of natural gas, measures will be considered to compensate for these costs as well. These will come from the state budget, the Council of Ministers said.

The Prime Minister also said that he is meeting road hauliers on Tuesday afternoon ahead of their May 18 national protest. He hopes to pool efforts with them and find sustainable solutions for the problems, and have as fruitful a dialogue as he had with the employers on Monday.