The Government Sets Up a State-Owned Oil Company
The Ministry of Finance proposes the establishment of a state-owned enterprise - State Oil Company, under the Minister of Economy, to perform all the functions of the state reserve for storage and renewal of reserves of petroleum energy products. According to the ministry, this will optimize the management of required reserves and will ensure their achievement and sustainable maintenance in compliance with the requirements of European legislation.
The proposal of the Ministry of Finance also says that, as an additional activity and in the next year the company will build gas stations throughout the country, in localities and on the main roads.
The aim was to "improve competition on the market and ensure the lowest possible prices for citizens and businesses".
Apart from that, the gas stations of the state-owned company would provide the opportunity to refuel electric cars.
"In order to ensure maximum competition in the fuel market, licensed warehouse keepers will not be able to refuse to store fuels of other depositors. The state-owned company is also envisaged to have warehouses for storage fuels of other investors as well, "the Ministry of Finance said.
The Lukoil case
A few days ago, the National Assembly adopted the requirement to divide the oil pipeline of Lukoil Bulgaria into separate tax warehouses, against which the oil company immediately protested. The texts of the Health Act, which amend the Excise and Tax Warehouses Act with the new requirements, were approved at the second reading in the plenary hall on Tuesday.
The General Director of Lukoil Bulgaria Bulat Subaev announced there was a real danger that the largest fuel supplier could stop working due to the changes in the law.
According to the changes, the Lukoil product pipeline, which is 320 km long, passes through different areas and connects the company's bases, can no longer be a single tax warehouse. The adopted texts require a license for each customs office territory on the respective base and means for measuring the inlet and outlet of the pumping facilities at each base to be installed. Greater control over the physical flow of fuels is aimed at.
Lukoil Bulgaria currently has a tax warehouse and a pipeline through which the products pass. The bases in Karnobat, Vetren, Stara Zagora, Plovdiv, Ihtiman and Iliyantsi are connected to it. One tax warehouse license has been issued for them, and control is carried out by several customs offices.
The changes are forcing the company to apply for a new tax warehouse license. Within a month, the company will have to divide its warehouse into seven separate tax warehouses and license each of them after the customs offices decisions have been issued. More measuring instruments must be installed on the pipeline itself, which starts from the refinery and ends in Sofia.
If they have not submitted documents for the new tax warehouses, the oil company's bases will have to stop working after November 30, 2020.
A month ago, the Commission for Protection of Competition started checking fuel prices at the request of the Supreme Administrative Prosecutor's Office. The CPC initiates proceedings to establish possible violations in determining the prices of mass automotive fuels in the production / import - storage - wholesale - retail trade chain, both at the horizontal levels and vertically, by Lukoil Neftochim Burgas, Lukoil Bulgaria, Saksa, Insa Oil, Rompetrol Bulgaria, Eco Bulgaria, Shell Bulgaria, OMV Bulgaria, NIS Petrol, Petrol and Tradenet Varna.
Momentary analyzes of the fuel market in BG for the period from 06.03.2020 to 26-27.03.2020 and for the period 30.03.-05.04.2020 for the average sales prices dynamics of petrol and diesel at the sites of petrol stations have been prepared by the Customs Agency and attached to the signal. Data on the average prices of fuels released for consumption from tax warehouses are also presented.
According to the analysis of the Customs Agency, the decrease in the average retail prices of petrol and diesel gradually follows the decrease in the average prices of fuels upon their release from tax warehouses. However, concerns remain in the public sphere that they are inconsistent with the significant drop in the crude oil price worldwide and are the result of the existence of anti-competitive practices in the relevant markets.