Natural gas prices will rise by 32.52% in November after the Energy and Water Regulatory Commission approved a price of €58.43 per megawatt-hour, excluding access, transmission, excise duty and VAT. The new price applies to Bulgargaz and will be charged to end suppliers and district heating companies. The initial proposal envisaged an increase of nearly 34%, while according to the regulator, without the additional quantities from the Chiren gas storage facility, the rise could have reached 39.37%.
Calculations by economist and lecturer at the University of National and World Economy Assoc. Prof. Shtеryo Nozharov show that the increase could feed through into the prices of a range of goods and services. Bread is expected to become 4 to 7 euro cents more expensive, meat by around 6%, and greenhouse produce by up to 10%. In most sectors, the increase will probably be between 5% and 6%, but in some activities it could reach 10%.
Bread producers are waiting for the measures
For bread producers, the key question is how the prices of not only gas but also flour will develop. In a bakery with a 35-year history, 90% of the production equipment runs on gas, and each of the oven burners has a capacity of around 125 kilowatts.
Owner Valeri Krastev said that the company had not changed the price of bread for two years and was currently waiting for the government’s decisions on compensation. In his words, the rise in gas prices will inevitably have an impact, but a more serious pressure would come from higher flour prices.
“If flour prices rise because gas is also used in its production, then we will be forced to raise the price of bread,” Krastev explained.Former Agriculture Minister Miroslav Naydenov does not expect a drastic increase in bread prices. According to him, producers have managed to keep prices stable despite the rise in other costs over the past two years.
Meat and dairy production are the most vulnerable
Naydenov identified dairy and meat production as the more severely affected sectors. Energy is involved at every stage—from soil cultivation and production to the cooling, storage and transportation of food.
Higher costs are also expected in the chemical industry, the production of nitrogen fertilizers, plastic products, plastic packaging, paper and pulp. Construction materials could become up to 10% more expensive, while hotels offering spa services are forecast to raise their prices by between 10% and 15%.
According to Assoc. Prof. Nozharov, competition and imports will limit the extent to which higher costs are passed on to final prices. Agricultural producers are also investing in photovoltaic systems and other energy sources to reduce their dependence on gas and electricity prices.
Regulated prices and compensation under discussion
Former EWRC Deputy Chairman Elenko Bozhkov pointed to the introduction of a regulated natural gas price for producers of public importance, including bakeries, kindergartens and hospitals, as one possible option. Expanding the compensation program because of high energy prices is also under discussion.
The rise in gas prices will not automatically lead to higher household electricity and heating bills during the current regulatory period. The EWRC said it had mechanisms to prevent another increase in these prices from January 1, 2027. It remains to be seen what measures will be adopted for businesses and to what extent they will limit the impact on the prices of goods and services.
Sources: btvnovinite.bg, economic.bg