Espreso. Global

Bulgaria imposes tax on transit of Russian gas through its territory

14 October, 2023 Saturday
14:31

Bulgaria has introduced a tax on Russian natural gas that transits through its territory to the European Union

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Bloomberg writes about it.

It is noted that this made traders weigh whether the move may spark a dispute with Moscow and fuel shippers amid an already volatile market.

A new bill, published Friday and coming into force immediately, introduces a fee of 20 Bulgarian levs ($10.76) per megawatt-hour of Russian-origin gas. That is about 20% of the price of Europe’s benchmark gas traded in the regional hub of Amsterdam.

Although Bulgaria does not import gas from Russia for its own needs, it is an important route for the significantly reduced pipeline flows that Russia is sending to Europe after large-scale cuts in 2022. The publication emphasizes that almost half of Russia's pipeline gas comes to Bulgaria from Turkey via the TurkStream connection for onward shipment to Hungary, Serbia, and other parts of Southern Europe.

"The move adds fresh uncertainty to an already rattled market. Europe’s gas prices have surged in recent days as threats to gas flows mount across the globe, including the Israel-Hamas war, potential strikes at key export plants in Australia and infrastructure vulnerabilities after a recent leak in a Baltic Sea pipeline where sabotage is suspected," the experts added.

Russia's Gazprom stopped supplying Bulgaria's domestic market last year after the country refused to pay for fuel in rubles and switched to alternative suppliers, including Turkey.

Last month, Bulgarian lawmakers approved a proposal to phase out Russian crude oil imports, bringing the country in line with other European Union members.

"For a European Union member state to threaten another EU member’s gas supply is contrary to European solidarity, rules and is unacceptable," said Hungarian Foreign Minister Péter Szijjártó.

The draft law is intended to implement EU sanctions against Russia in response to its invasion of Ukraine.

According to the lawmakers who drafted the bill, its goal is "fair taxation of the profits made on the territory of the state and the increase of budget revenues".

  • On September 30, Bulgaria accused Russia of strengthening Eurosceptic sentiments aimed at blocking the country's deeper integration into the European Union and the adoption of the bloc's single currency.

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