Today, the Energy and Water Regulatory Commission (EWRC) set the price of natural gas for the month. It is 2.25 percent lower than in July and is BGN 18.67 per megawatt-hour (excluding prices for access, excise, VAT and transmission). The decrease compared to July, when the price was BGN 19.10 per megawatt-hour, is BGN 0.43.
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On July 10, Bulgargaz submitted an application to the Commission for a 2.2% higher price of natural gas for 8 months of the year. It had to be traded for BGN 19.52.
Where does the difference come from – from the requested price increase to the price reduction?
The management of Bulgargaz commented that they had received a letter from the Commission on July 23. It sought to provide reporting pricing elements that were not known at the time of the application, 10 July. That is why on August 1 Bulgargaz has prepared and submitted an updated application for approval of the price of natural gas for August 2020, including the required by the EWRC book values of price-forming components as of July 31.
Thus, for the fifth month in a row, the tendency for blue fuel to become cheaper continues. The reduction started on April 1 – when the terms of the contract between Gazprom Export and Bulgargaz were changed, after the formula for determining how much fuel would cost in our country gave precedence to the prices of gas hubs in Europe and the weight of the oil component is smaller. Until March 31, gas cost BGN 44.04 per megawatt-hour.
The regulator announced that the decision adopted by EWRC took into account the updated price of natural gas proposed by Bulgargaz, and it reflected the data on the market indices of European gas hubs as of July 31, as well as the average monthly conversion rate from euro to USD for July of the European Central Bank.
The price of natural gas for August includes the price of natural gas at the entrance of the gas transmission networks, the component for “public supply”, as well as for covering the costs of Bulgargaz for storage of quantities in the underground gas storage “Chiren” obligations under the Emergency Action Plan. It does not include prices for access and transmission through the gas transmission network, which customers have to pay to final suppliers.
In approving the price of natural gas, the EWRC shall take into account the stated estimated quantities of natural gas from imports for the domestic market, the changed terms of the contract between Bulgargaz and Gazprom Export and the Bulgarian National Bank average exchange rate of BGN against the foreign currency in which the import is paid. natural gas. The powers of the Commission are only to establish whether the application of the public supplier Bulgargaz meets the requirements of Ordinance number 2 for regulation of natural gas prices and the supply contract between the two companies.
