Bulgargaz has withdrawn an earlier request for a small reduction in Bulgaria’s regulated wholesale gas price and replaced it with a proposal for a 4.6% increase. The change follows technical problems that disrupted contracted deliveries from Azerbaijan. The state-owned supplier is seeking an August price of €39.43/MWh, excluding transmission and access charges, excise duty and value-added tax.
In its initial application, Bulgargaz proposed €37.36/MWh. That level would have meant a modest reduction versus July’s regulated rate of approximately €37.70/MWh. The revision reflects how short-term changes in contracted supply can affect regulated pricing.
Role of Azerbaijan and replacement volumes via Turkey
Azerbaijan is Bulgargaz’s principal long-term supplier outside Russia and is central to Bulgaria’s diversification strategy. With reduced August deliveries expected, Bulgargaz would need to source replacement volumes from Turkey. The cost of those replacement purchases would depend on prevailing regional prices, available capacity and commercial terms.
Azerbaijani gas has generally provided Bulgaria with a more competitive supply component than short-term purchases in neighbouring markets. Any interruption affects both physical availability and the weighted-average cost used in the regulated price calculation. This links the contracted supply disruption to the tariff level applied to the domestic market.
Impact on downstream costs and power market conditions
The proposed increase remains moderate compared with earlier gas-price shocks experienced during Europe’s supply crisis. Even so, it is expected to feed into costs for district heating companies, industrial consumers and gas-fired generators. How these changes translate into electricity prices depends on how often gas units become marginal during August.
The timing of marginal generation is particularly relevant during evening periods when solar production falls. Under such conditions, gas-fired output can influence power pricing more directly. The extent of that effect would therefore vary across hours during the month.
Diversification limits but does not remove supply risk
The episode also highlights that diversification does not eliminate supply risk for Bulgaria. Access has been expanded to Azerbaijan, Greece, Turkey and LNG infrastructure, but each route can still be affected by technical outages, congestion and commercial availability. Bulgaria’s resilience therefore depends on keeping multiple supply options active rather than relying on a single dominant source.
Bulgargaz’s ability to secure replacement gas through Turkey prevents the Azerbaijani disruption from becoming a physical supply problem. However, replacement volumes come at a cost that is reflected in the proposed regulated tariff of €39.43/MWh.
