Russia's cessation of gas supplies to Bulgaria is causing many companies in this country to panic because of concerns about supply shortages and soaring prices.
"We're on the brink. We'll have to raise prices further," said Valery Krastev, owner of a bread factory in the northern Bulgarian town of Montana. "How can people pay for these sandwiches when the price goes up?" he worries.
The government insists Bulgaria has alternatives to Russian gas and will not reduce the supply to people and companies, and calls Moscow's decision to block gas faucets from last week an act of "blackmail."
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| A worker works near gas pipelines at the Bulgartransgaz compressor station in Ihtiman, Bulgaria |
Russia already requires customers to buy gas to pay in rubles instead of dollars or euros. If customers accept this payment term, they risk violating sanctions that the West has imposed on Russia. Poland and Bulgaria firmly refused the gas payment conditions set by Russia.
Russia's Gazprom announced on April 27 that it would stop delivering gas to Bulgaria and Poland because these two countries "failed to pay in rubles" on time.
After Russia's move, the countries neighboring Bulgaria intervened, increasing gas deliveries to this country. However, these are only temporary supports, as Bulgaria has imported more than 90% of its gas from Russia over the past several decades.
The fact that the Bulgarian government has not come up with a long-term solution to ensure the need for about three billion cubic meters of gas per year is making businesses both large and small in this country "sitting on the fire", according to Diana Simeonova, AFP commentator resident in the Bulgarian capital Sofia.
Many people living in the Bulgarian capital Sofia still remember the time when a gas exploration joint venture between Russia and Ukraine cut its deliveries to Europe for several days in a row in January 2009. As a result, their homes were left unheated during the cold winters, prompting the government to impose quotas on gas allocation to industries.
Energy Minister Alexander Nikolov confirmed that after Russia cut off supply, Bulgaria had to pay 10% more to ensure it received enough gas for May through an intermediary company.
"I can't believe someone is trying to convince us that this is good for us. No, it's not," said Konstantin Stamenov, head of Bulgarian Federation of Industrial Energy Consumers (BFIEC) and senior executive of a steel manufacturing company, said.
To keep prices stable and secure energy supplies, the Bulgarian government is committed to finding more gas suppliers. They are speeding up to finalize plans to build another major pipeline connecting the Bulgarian gas network with Greece by the end of June.
This will allow the state gas company Bulgargaz to negotiate an increase in supply under the existing contract with Azerbaijan to one billion cubic meters per year and receive more from liquefied natural gas (LNG) transit stations in Greece. Bulgarian Prime Minister Kiril Petkov also said the government is in talks to buy LNG from the US and Egypt.
Analysts say gas prices could even fall if Bulgaria signs long-term LNG supply contracts.
"We have a huge opportunity to achieve a stable diversification of gas supply," Energy expert Martin Vladimirov from the Center for the Study of Democracy, based in Sofia, Bulgaria said
However, economist Georgy Angelov from the Open Society, USA, warned that "this possibility will not be realized overnight".
Currently, all operations are still taking place normally at the gas compression station of the company Bulgartransgaz near the town of Ihtiman, western Bulgaria, where Russian gas is still circulating.
But Bulgargaz, Bulgaria's national gas operator, is no longer allowed to use any part of the gas, as most of it goes to Greece and North Macedonia.
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| Pipelines to transfer Russian gas to Europe |
Expert Vladimirov warned that Russia could completely abandon the direct contract with Bulgargaz, causing Bulgaria to buy gas at higher prices through intermediaries such as the Hungarian company MET, which is known to have a close relationship with Gazprom.
"This will eventually lead to us remaining dependent on Russian gas, but on even worse terms," he said.
Fearing a supply crisis will occur, some manufacturers in Bulgaria have begun to improve their equipment to be able to use alternative fuel sources to gas. "It will be more expensive, but not impossible," said Krasen Kyurkchiev, owner of home appliance maker Ficosota.
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