From 1 January, the discount of 25 cents per liter will cease for everyone
Let’s make aid truly social, it is not levied from taxes and given to the rich, as has been the model so far, says Minister Nikola Stoyanov
From 1 January 2023, the aid of 25 cents per liter of fuel will cease and a new targeted support mechanism will be developed. The words of several ministers over the weekend clarified this.
The previous support will be discontinued after the new year due to comments from the European Commission that it is a form of unauthorized state aid, as the discount is only granted to Bulgarian citizens.
At the moment, the government is preparing a new mechanism under which there will be support for the poor, and not for everyone, regardless of their income, said Deputy Prime Minister Hristo Alexiev. Socially disadvantaged people who do not have a car will receive vouchers for travel on public transport. If enough revenue is raised, next year’s support could be expanded.
“Many people with high incomes have benefited from the current tax rebate for all of us. So it turns out that most likely the state subsidizes vacations and walks to the villas of the rich. The second big winner is “Lukoil”, because their production is subsidized with money from the budget,” said Economy Minister Nikola Stoyanov.
He specified that the government
will extend the measure
and it will make it really social to have help for businesses too, because fuel prices are reflected in all products. This would also be a strong anti-inflationary measure.
“The government does not stop 25th century aid and does not take from the poor to give to the rich, as was the model defended by the previous Minister of Economy. Now
we will reap the excess profits of a huge
company and these funds will return to
people and businesses
This is a real social policy,” Stoyanov said.
The funds for granting the aid must come from the taxation of the excess profits of the oil industry companies. According to the texts of the profit tax law, which must finally be voted on by parliament, the new tax rate is 33%, to which is added the standard rate of 10%.
In fact, the biggest revenue is expected to come from “Lukoil Neftokhim”. Ten days ago, the government and the management of the refinery agreed that from January 1, 2023 it will resume its own oil supplies and fuel sales. Currently the plant operates on an offshore basis, with oil supply and fuel trading entrusted to “Litasco” – the company that owns the refinery.
Since the model change, the government is counting on windfall revenues of BGN 700 million from Lukoil Neftohim alone next year, which money will go to the Energy Security Fund and will be used to pay fuel compensation.
The new aid program could fail, however, if Russia cuts off oil supplies to countries that have imposed the $60 price cap.
Alexiev said he would work on several options to help with high fuel prices, but there is a danger they will become insignificant if supplies from Russia stop.
At present, the Burgas refinery processes only Russian oil, and if Moscow stops tankers to Bulgaria, the Burgas plant could run out of raw materials for petrol and diesel production from mid-January. Therefore
our country will have to
import fuel,
to have enough quantity at gas stations.
Deputy Prime Minister Alexiev told “24 Chasa” that plan B is also being worked on, which envisages the delivery of part of the crude by tankers across the Bosphorus. He specifies that the refinery was also asked to develop a variant and to present it.
On the occasion of last week’s cabinet decision, by which the government allowed the Burgas refinery to export, the deputy prime minister specified that this applies to petrol, kerosene, heavy fuel, fuel for ships.
However, the export of diesel produced from Russian oil is prohibited. The annual fuel consumption in the country is 3 million tons, of which 2.5 million are diesel.
