“The government must react in a timely and coordinated manner to protect the national interest and prevent possible shocks in the fuel market. This is a serious geopolitical and economic issue. Bulgaria cannot remain passive, because the refinery in Burgas is a strategic object. A clear action plan and control mechanism are needed to guarantee stability in the sector“, said former acting Minister of Economy Nikola Stoyanov.
According to him, the most important thing is to guarantee fuel supplies to the Bulgarian market.
Almost four years after the start of the war in Ukraine, the US imposed sanctions on the Russian energy giants “Rosneft“ and “Lukoil“. The goal of the US administration is to get Putin to sit at the negotiating table and stop the war against Ukraine. Surprisingly for many observers, China also complied with the sanctions.
Thus, the most strategically important facility in Bulgarian energy - the refinery near Burgas - fell into Washington's sanctions list.
The sanctions are a serious blow to Russia, according to Stoyanov.
„Rosneft“ is the second largest Russian company. In general, after „Gazprom“, „Lukoil“ is the third, and „Lukoil“ is the largest private company in Russia. That is, the blow is serious, the oil sector in Russia is responsible for about 10% of the country's gross domestic product. These two companies, the largest in their oil sector, have over 50% share in this sector. That is, we are talking about a blow to 6-7% of Russia's gross domestic product. On paper, of course, because in practice it is very difficult to completely exclude and implement these sanctions. Moreover, there is such an example, Russian oil companies that were already sanctioned earlier in the year. There you can see that in the first one or two months their turnover drops significantly, but later they manage to find some ways to get around and come back“, he said.
Stoyanov added that the state should be ready with a backup scenario if the refinery's operations are limited. A possible option is the appointment of a special administrator to ensure the continuation of operations until the situation is clarified.
“We are not talking about nationalization, but about a temporary measure that will allow the country to cope with the risks. This is a tool that the law allows. This special manager ensures that no funds will go to the Russian state from the activities of this refinery. And then, this meets the goals of the sanctions, i.e. it could logically be applied. Then we say, please exclude us, since we will not allow funds to go to Russia“, Stoyanov explained.
In his words, the topic of selling the company must be considered with care and professionalism.
“The sale is a matter of momentary conjuncture and international pressure. A strategic buyer must be sought who will be a reliable partner and maintain production. "We cannot act hastily, because this is a key element of Bulgaria's energy security," he stressed.
Stoyanov added that such deals are difficult to make and require time, diplomacy and stability in the market so as not to lower the price of the asset.
He also explained that fuel reserves need to be checked – by law, Bulgaria must maintain a minimum of 90-day strategic stock, as well as a 60-day commercial reserve.
“If it turns out that part of the stocks are outside the country, they must be immediately provided on our territory“, he warned.
According to him, there is no immediate risk of a fuel shortage, but the state must carefully monitor the process and be ready to react if problems arise in the supply chains.
“The prices of the columns depend not only on the situation in our country, but also on the world markets. If the state acts wisely, there will be no shock increase in prices, but constant monitoring and dialogue with the industry are needed“, Stoyanov also said.
Nikola Stoyanov called for coordination between ministries, businesses and institutions, as well as for active communication with partners from the EU and the US.