Page 13 - Euroil Week 21 2020

EurOil POLICY EurOil
Bulgaria gets tough with fuel retailers
BULGARIA
Fuel and energy bills are a contentious issue in Bulgaria.
BULGARIA is once again coming down hard on fuel retailers over suspected collusion, weeks after proposing increased tax controls over the sector.
The country’s Commission for Protection of Competition (CPC) announced on May 27 raided the offices of the Bulgarian Petroleum and Gas Association (BPGA), as an investiga- tion continues into whether its members had worked together to set prices. Earlier on May 20 it ordered the offices sealed.
CPC has launched a probe into the activities of Lukoil Neftochim Burgas, Lukoil Bulgaria, Saksa, Insa Oil, Rompetrol, Shell Bulgaria, OMV Bulgaria, Petrol and several other companies. This was after retail fuel prices dropped by only 11% on average in March, despite a 47% plunge in global oil prices.
Investigators have conducted numerous checks into leading fuel retails over the years without finding any proof of collusion. Fuel and energy costs have long been a thorny issue in Bulgarian politics.
The government has also unveiled plans to create a new national oil company (NOC) to manage Bulgaria’s oil and fuel reserves and develop filling stations across the country. The new entity will improve competition and ensure that fuel prices are more responsive to global trends.
“It is not a secret that for years the retail fuel prices are a challenge for our society,” Finance Minister Vladislav Goranov was quoted as say- ing by Reuters on March 18. “We do not claim
that there is something improper. We want to create more competition and show, by stepping on this market commercially, the actual price at which, with a minimum markup, fuels can be sold in Bulgaria.”
The new company will assume control over the state’s fuel depots and provide smaller fuel retailers with access to them. Private owners of such facilities will not be able to refuse to allow other companies to use their storage space. According to Goranov, at present six companies control 91% of fuel storage in the country.
Bulgaria also plans to build up to 100 new fill- ing stations if necessary, with the first ones being completed within a year, Goranov said. The changes require parliamentary approval.
Meanwhile, Parliament has just voted in favour of increased tax controls over the coun- try’s biggest fuel supplier, Russia’s Lukoil. The company, which owns Bulgaria’s 190,000 barrel per day (bpd) sole refinery in Burgas and over 220 filling stations, will have to register its six fuel deposits and a fuel pipeline running from its refinery as separate tax entities. At present these assets are treated by the tax office as a single fuel depot.
Goranov has said the move will improve transparency and ensure the proper collec- tion of excise duties from fuel sales. But Lukoil has warned it will incur large investment and administrative costs because of the move, which it says will not lead to any increase in budget revenues.™
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