In compliance with the provisions of the Energy Act, Bulgargaz EAD – a daughter company of the Bulgarian Energy Holding EAD - have filed an application to the State Energy and Water Regulatory Commission (SEWRC), for approval of the price of natural gas public supply during the third quarter of 2012.
The pricing factors, such as quotations of alternative to natural gas fuels at the Mediterranean commodity exchange, as well as a minimum a-30-day period average ratio of BGN/US Dollar exchange rate, have been taken into account.
At present, despite the efforts that have been made, it is impossible to apply the arrangements reached, including at the highest governmental level, regarding decrease of costs for import of natural gas, due to the fact that the respective documents, legalizing the agreements, have been signed by Bulgargaz EAD, sent to the Bulgargaz EAD suppliers, but not yet signed by our counterparties. Once the documents are received, Bulgargaz EAD will immediately present them to the SEWRC.
Taking into consideration the aforementioned, Bulgargaz EAD’s proposal for a marginal price of natural gas public supply during the third quarter of 2012 is BGN 809.05 per 1000 m3, VAT and excise excluded. The proposed above price, which is BGN 109.95 per 1000 m3 (15.73 %) higher than the public supply marginal price for the period April-June 2012, is based on:
• Higher BGN/US Dollar exchange rate. The average exchange rate applied during the second quarter of 2012 was BGN 1.47728 /1 USD, while for the third quarter it is 1.55158/1 USD, i.e. 5.02 % higher.
• „Not coming true” of SEWRC’s report parameters, upon determination of second quarter price, and specifically the need of higher revenue from application of the approved price BGN 699,10 per 1000 m3, VAT and excise excluded.
• Necessity of injection (storage) of natural gas volumes (148,5 million m3) into UGS Chiren, with a view of securing the supplies during the next heating season.
In case the storage is postponed (which could increase risk regarding 2013 winter supply), the marginal price would be BGN 766,73 per 1000 m3,VAT and excise excluded.
The calculations above do not include Bulgargaz EAD’s outstanding revenue for previous periods. In order to fully inform our clients and the public, we should note that for 2011 the company had reported a loss amounting to BGN 73,2 million. Taking into account the aforesaid, the 2010 loss amounting to BGN 37,392 million, and the operational loss by April 30, 2012 amounting to BGN 101.821 million, the company’sextreme difficult financial situation and cash flow become obvious.
Realizing the burden that shall be borne by our customers if the figures above are approved, we would like to assure our clients and the public that we will inform them and all institutions concerned, as soon as the agreements - regarding the decrease of costs of natural gas import, with a view of their application in the Bulgargaz EAD sales to its customers - are finalized.
Press release