Regulator Chief on New Natgas Price for Fourth Quarter

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Regulator Chief on New Natgas Price for Fourth Quarter

"We can see a prerequisite for an even larger decrease in the price of natural gas from October 1 than the 1.36 per cent proposed by Bulgargaz, but the company should also be compensated for underpaid income," State Energy and Water Regulatory Agency (SEWRA) Chairman Angel Semerdjiev commented to journalists on Tuesday.

The amount of the natural gas price decrease will depend on the fluctuations of fuel prices on world markets, the dollar/lev exchange rate and the amount of supplies of locally extracted gas. Specific agreements are to be reached shortly with local gasfield concessionaire Melrose, the regulatory body chief said.

Bulgargaz is entitled to compensation for underpaid income within two quarters since the price freeze, but there is a "major discrepancy", as Semerdjiev put it, between the estimates of the company (some 78 million leva) and the regulator (16-18 million leva) about the amount of the underpaid income for the first and second quarter of 2010. The amount of Bulgargaz's underpaid income for the third quarter of 2010 has yet to be finalized but there, too, the estimates of the company and the regulator diverge.

Central heating can cheapen only if the natural gas price falls by at least 10 per cent, he commented. He was categorical that the price of heat will either remain unchanged or decrease by 4-5 per cent, but an increase is out of the question.

Semerdjiev stressed that the district heating companies have optimized their costs and the prices they were assigned back on July 1, 2010 are strongly restrictive. He added that companies which have invested in modern technologies did not increase their central heating prices by a large margin but those which have not built co-generation capacities have shifted the gas price hike onto their customers. "Unfortunately, the Sofia District Heating Company is not an effective utility - unlike Pleven and Bourgas," the SEWRC Chairman said.

Source: BTA

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