Bulgaria delays rejecting Russian oil for up to a year

Bulgaria has decided to extend the timeframe for giving up Russian oil from the initial 30 days to up to 1 year, aiming to prevent speculation and a sudden surge in fuel prices. This decision was reached by the parliamentary committee on economic affairs on Wednesday. The new deadline for this transition is set for October 1, 2024. This change was discussed during the second reading of amendments to the Law on the Implementation of Restrictive Measures in response to Russia’s actions destabilizing the situation in Ukraine. These amendments are expected to be further reviewed in the plenary hall.

To mitigate the risk of a sharp increase in fuel prices, Economy Minister Bogdan Bogdanov cautioned against implementing a 30-day ban on Russian oil imports, as previously planned. He emphasized that a more realistic timeframe would be 12 months, ending on October 1, 2024. Bogdanov expressed concerns that the shorter 30-day deadline could lead to substantial price hikes and create opportunities for speculation, potentially even resulting in fuel shortages.

Bogdanov also noted that there are alternative sources for non-Russian oil, including those in the Black Sea region. However, securing timely negotiations for the supply quantities is crucial to maintaining the production cycle of the Lukoil refinery. He emphasized the need for well-defined contracts and parameters to ensure consistent deliveries and the quality of the raw materials received by the refinery.

Furthermore, the MPs agreed on a phased reduction plan for Russian oil usage. Until the end of the current year, Lukoil Neftohim Burgas will be limited to using no more than 80% of Russian oil in their production. This percentage will decrease to 75% by March 31, 2024, and further reduce to 50% by the end of June. By September 30, the aim is to reduce Russian oil usage by 25%, while also ensuring that the turnover from the produced fuels remains at or above the average for the last five completed financial years.

Additionally, the MPs outlined a clear plan for the refinery to make advance payments on excess profits. As of now, the company has already made one advance payment of BGN 89 million at the end of March, with two more installments expected. In total, the budget is anticipated to receive another BGN 270 million from these advance payments.

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