The Commission for Energy and Water Regulation (KEVR) approved yesterday the price of natural gas for September in the amount of BGN 353.21 per megawatt hour (MWh), excluding access, transmission, excise and VAT prices. At this price, “Bulgargaz” will sell natural gas to the final suppliers of blue fuel and to persons who have been issued a license for the production and transmission of thermal energy.
The KEVR explained that the leading reason for the high price growth for September was the continued increase in international natural gas prices in August as a result of Russia’s military aggression in Ukraine. In addition, greatly reduced or suspended supplies from Gazprom lead to increased uncertainty on the gas market in Europe and the formation of unrealistically high quotations.
An additional negative factor is the increased rate of the US dollar, which is a pricing element. Regardless of the increase, the data show that the established price of natural gas for September is significantly more competitive compared to the values of the European gas markets for deliveries in September, which are at levels of 232 euros/MWh (453 BGN/MWh), indicated by KEVR.
From January 1, 2022, KEVR approved BGN 133.41/MWh (without access, transmission, excise and VAT prices). This means that from January to September the price rose by 164.76 percent.
This is how the price “moved” in the following months of the year:
In February withIn January, fuel became cheaper compared to January – up to BGN 109.88/MWh. In March, however, it became more expensive again – to BGN 113.73/MWh. The established price was 3.5 percent higher than in February. At the time, the KEVR pointed to the restriction of production from the Chiren underground gas storage facility and the record high prices on the European gas exchanges as reasons. By that time, the war in Ukraine had already begun. KEVR’s decision was delayed and was made on March 7.
As of April 1, KEVR approved a price of BGN 142.59/MWh (excluding prices for access, transmission, excise duty and VAT). The level was 25.3 percent higher than in March, but significantly below the one proposed in the initial application of “Bulgargaz” – BGN 179.36/MWh. KEVR argued with the increased supply uncertainty due to Russia’s threats to cut off gas supplies. “Last month, we witnessed a serious rise in prices on the European gas exchanges, and only on the day of the open meeting of the KEVR on March 30, the price rose by 15 percent,” the regulator said at the time.
On May 10, “Bulgargaz” informed KEVR that the Ministry of Energy had started an investigation regarding the pricing of natural gas for the month of May, which ended on May 12. On May 13, the regulator decided that the price would become BGN 162.17/MWh (without prices for access, transmission, excise and VAT). The main reason for the increase, as the regulator pointed out, was the unilateral suspension of supplies by Gazprom.
As of June 1, the price at which “Bulgargaz” sells natural gas to final suppliers of natural gas and to persons who have been issued a license for the production and transmission of thermal energy has become BGN 141.36/MWh. It was 13 percent lower compared to May and below the level for April, “which proves that the secured supplies of liquefied gas are a real alternative to the contract unilaterally terminated by Gazprom,” KEVR announced at the time. The regulator explained that the public supplier formed the total estimated quantity for the domestic market based on two sources – under a contract for the supply of natural gas with a company from Azerbaijan and under an Agreement for the supply of liquefied natural gas (LNG).
From July 1, however, the price jumped to BGN 186.17/MWh. At the time, the KEVR cited as the main reason the increased price of gas worldwide as a result of high demand and lower supply caused by Russia’s military aggression in Ukraine. “In the conditions of greatly reduced or stopped supplies of natural gas from Russia and the increasing uncertainty of energy supplies, a number of European countries are also forced to conclude short-term contracts, which, in an unbalanced gas market, is a factor in the higher prices of international indices”. read the regulator’s announcement.
As of August 1, KEVR confirmed the price of natural gas at BGN 297.89/MWh. “The main reason for the high price growth for August is the increased price of natural gas as a result of Russia’s aggression in Ukraine. In the conditions of greatly reduced or stopped supplies of natural gas from Russia and increasing uncertainty, many of the countries on the continent also conclude short-term contracts. These factors lead to a debalancing of the gas market and to higher quotations of the international indices,” noted the regulator at the time. KEVR reported that regardless of the increase, the data showed that the price of natural gas in Bulgaria remains lower than the prices of the European gas exchanges – at the largest gas hub TTF they marked a new historic growth and exceeded 212 euros/MWh. KEVR specified that the main reason for the lower price in our country is the favorable price conditions under the gas supply contract from Azerbaijan. Part of the delivered quantities are at a significantly lower price and are not tied to the prices of the international exchanges, but to the oil prices for 6 months ago.
The Commission confirms the already expressed opinion that it is extremely important that in the coming months “Bulgargaz” makes maximum efforts to guarantee security of supplies and stability of prices for Bulgarian household and commercial consumers.
At Europe’s biggest gas hub TTF, meanwhile, prices also rose sharply, bourse trading data showed. On the first working day of this year – January 3, natural gas there was sold for 72.43 euros per megawatt hour. On February 24, when the war in Ukraine started, the price jumped to 128.17 euros/MWh, which was the first annual price record. However, on March 7, this record was improved with a level of 179.24 euros/MWh. On July 7, a new price maximum of 185.71 euros/MWh was recorded. In the following days, TTF’s blue fuel continued to increase in price, reaching on August 26 the absolute price peak to date – of 346.52 euros/MWh. After that date, the price began to fall, with natural gas currently selling for €234.77 per megawatt hour in Europe. However, since January 3, it has gained 224.13 percent.