Bulgarian government doubts it will collect gas taxes from Putin

The government has decided to withdraw the estimated revenue of €1.2 billion from the new tax on the transfer of Russian gas from the state budget 2024 because the ruling majority doubts that the money can be obtained, Finance Minister Asen Vasilev said on Sunday.

At the end of October, the EU Commission announced that Bulgaria has every right to introduce a new tax of €10/MWh on Russian gas passing through Bulgarian territory, despite protests from Serbia and Hungary that this would lead to higher fuel prices. The authorities in Sofia have guaranteed that the money will be sought by Gazprom and not by the Russian gas monopoly’s European customers.

Bulgaria expected revenue from the new fee to be paid by mid-November, but the country has not yet been able to collect money from a Russian company.

“There were additional investments planned (with this money), but they fell out of the general framework of the budget,” said Vasilev.

Euractiv Bulgaria first reported that the state may not receive any money from the new fee as Bulgaria is trying to impose a tax on pipeline gas, which can hardly be certified as Russian because it is a mixture of several sources. Russia has mechanisms to conceal the origin of the fuel, which first passes through Turkey before entering Bulgaria’s gas pipeline system.

So far, there has been no reaction from Gazprom regarding the introduced energy contribution, and it is not clear whether the Russian concern intends to pay it. Bulgarian Finance Minister Asen Vassilev has already said that if the Russian gas monopolist refuses to pay, the seizure of its financial collateral under contracts in Bulgaria or assets in the country will occur.

However, the largest parliamentary force, GERB, which is part of the ruling majority, announced that the fee may never be collected and demanded that the amount be excluded from the 2024 budget. If Gazprom does not pay the fees, it could increase Bulgaria’s budget deficit by nearly 1% as the country tries to join the eurozone starting 1 January 2025.

“There are concerns (in parliament over the gas tax) that are unfounded,” Asen Vassilev said.

On Sunday, the finance minister also accused the Russian oil company Lukoil, which owns the Bulgarian refinery in Burgas, of trying to “instil fear”.

On Saturday, the management of the Lukoil Neftochim Bulgaria refinery announced that it may stop working if the government bans from 1 January the export of petroleum products produced from Russian oil.

“A month and a half to two months ago, the parliament adopted a law that should gradually reduce the use of Russian oil. The ban on exports from 1 January concerns Russian oil. If there is non-Russian oil, it can easily be exported, Vassilev also said. According to the minister, this will simply accelerate the transition to non-Russian oil.

(Krassen Nikolov | Euractiv.bg)