site.btaElectricity Price Subsidies for Businesses Lead to Excess Profits and High Inflation, Experts Report

The lack of criteria in granting compensation for electricity prices for non-domestic consumers (enterprises) has led to the generation of excess profits for the supported businesses, shows data from the Ministry of Finance, officially presented by Minister Rositza Velkova-Zheleva and quoted by the Institute for Development and Management of Resources (IDMR).

The Ministry of Finance confirmed another fact presented by the IDMR, namely that "many of the enterprises have already transferred the burden of high energy prices to end customers and households". The effect of state aid to deal with the crisis of high electricity prices is only that businesses increased their profits at the expense of the taxpayers, IDMR pointed out, citing information from the Ministry of Finance on the state of the budget balance under the consolidated fiscal programme for November.

About 633,000 companies have access to compensation. IDMR has repeatedly warned that both loss-making and profitable enterprises are supported with these funds. Financial assistance did not bring down or hold down the final prices of goods and services, but is a generator of inflation. In one year, the consumer basket became more expensive by nearly 50 per cent, because the prices of the offered goods and services included increased assumed costs, despite the state aid received by the business amounting to over BGN 10 billion. IDMR proposed that the aid for enterprises be determined by groups, and that the criteria for receiving energy subsidies to include the obligation for enterprises to apply energy efficiency measures. There continues to be a lack of accountability of the funds spent, the IDMR stressed.