Bulgarian gas consumers have been paying significantly higher prices compared to European exchanges for the third month in a row.
The Bulgargaz tariff for March is around 55 euros per MWh, while on March 20 and 21, futures for the month ahead on the Dutch TTF exchange fell to 39 euros. The situation is similar on the spot market, where the lowest price in the last 20 months was recorded. This difference was exactly 40 percent on Tuesday.
The average price on the TTF since the beginning of March is 46 euros per MWh, which means that the Bulgarian price for this month is 19 percent higher.
Despite the drastic difference, this topic remained out of the political focus. Also, employers’ organizations are not protesting about higher gas prices in Bulgaria compared to the European Union.
It is interesting that at the Balkan gas hub, where Bulgargaz is the main seller, the prices during March are around 45 euros per MWh, that is, approximately the same as on the European stock exchanges.
This means that consumers in the regulated market, such as households, district heating systems and small businesses, pay an 18 percent higher price.
The regulated gas price is approved by the energy regulator, and the formula takes into account the average price on the TTF in the previous month (gas from this exchange participates in the energy mix with about 70 percent), as well as the price of Azerbaijani gas, which is indexed on the basis of oil. If gas is used from Chirenu storage, its price is included in the mix.
Considering that, the Bulgargaz tariff should be lower than the market rate. However, this is not the case.
The price of Azerbaijani gas should not be affected by the increase in the regulated price, because during the previous six months (from September 2022 to February 2023), the price of oil has been in a continuous decline and averaged below 90 dollars per barrel.
The quantities from Chiren, which were purchased last summer at a significantly higher price (about 200 euros per MWh), are not used at all. The data shows that natural gas was last withdrawn from storage on February 16, 2023. This means that this gas should not be included in the March tariff.
Bulgargaz has already submitted an application for the price that will be valid from April 1 and it is only 3 percent lower than the current one and amounts to about 53 euros per MWh.
