Due to the sharp rise in excise duties proposed by the EC, an increase in smuggling is expected
Bulgaria is not ready for the green transition in transport, according to the oil business
WITHAfter the record prices of electricity and gas, for which there is no prospect of calming down soon, comes a shock rise in gasoline, diesel, LPG and methane. This became clear on Thursday at a conference on the future of the oil business in Bulgaria, organized by the Bulgarian Oil and Gas Association (BPGA).
The reasons for the rise in fuel prices are the changes prepared by the EC in the taxation and introduction of an environmental component in their price, explained Svetoslav Benchev – a lawyer of the branch organization.
According to the new new European directive from 2023, the excise duty on all fuels used in transport will be calculated according to energy content, and not per liter, as is currently the case. Only from this change the indirect tax for gasoline will increase by 50 cents, for diesel by BGN 1.40, for propane-butane the increase will be from 18 to 40 cents, and for methane, which is used as motor fuel – up to 76 st.
To these values must be added the environmental component, which at 50 euros per tonne of carbon emissions will add another 55-65 cents per liter, according to calculations by the association. The final accounts show that an increase per liter of fuel of at least BGN 1.20-1.32 is expected.
Thus, the new taxation will lead to almost double the price of petrol and diesel if compared to their current levels, and
from 2023 liter
will be about 4 leva
The calculations are valid if oil prices do not change in the meantime. However, it is expected that its quotations will rise next year due to the growing demand related to the recovery of the world economy. By the end of this year, there will most likely be a new retail increase to at least BGN 2.40.
The rise in fuel at gas stations is currently lagging behind the growth of international prices, because our traders still had stocks from mid-summer. At the moment, however, they are already running out and there were no reserves to keep prices. And after the meeting of the OPEC producer countries, which decided not to increase production, the trend for oil was clear – a smooth but steady rise.
Bulgaria is not
ready for the transition
in transport
according to the parameters of the EU Green Deal, said Zhivodar Terziev – chairman of BPGA. According to him, the new environmental requirements will make moving by car and transporting goods very expensive.
Terziev sees a problem for Bulgaria in the transition to alternative fuels for cars – electricity and hydrogen. He gave the following example – an average of 300 million liters of fuel were sold in Bulgaria per month, which is equivalent to 1,500 gigawatt hours of electricity for electric vehicles. If they completely replace those with an internal combustion engine, there will be no one to produce as much electricity to drive them, nor will it be possible to provide the infrastructure to charge them.
The EU’s requirements are to have charging stations along the trans-European corridors every 60 km in Bulgaria by 2025, which is very difficult to implement, Terziev said. At the moment, the electricity supplied to the gas station was usually up to 30 kilowatts, which was enough for its normal operation, but not for the construction of charging stations for light trucks. Only the natural gas trading facilities for motor fuel had 250 kilowatts provided.
And according to the new EU requirements, by December 31, 2025, each charging station must have a minimum power of 300 kilowatts and include at least one charging column with a minimum power of 150 kilowatts. 5 years later, the parameters are changed to a minimum power of 600 kilowatts and at least two chargers with a minimum of 150 kilowatts.
There should be charging stations for heavy goods vehicles along the trans-European corridors by 31 December 2025 with a minimum capacity of 1,400 kilowatts and at least one column with at least 350 kilowatts. By December 31, 2030, the requirements will be raised to 3,500 kilowatts by two stations with at least 350 kilowatts.
In order to provide such infrastructure,
will be needed
huge investments,
which companies
they could hardly
to do
without state aid. On the Trakia highway, which is most saturated with gas stations, the sites could not receive such large amounts of electricity stably, there were no substations of the electricity distribution companies.
Separately, the question of who will deliver this electricity to the charging stations remains unresolved, Terziev said. In order to ensure their faster construction, BPGA states that it will be necessary to have relief for their licensing for participation in the electricity exchange and for the construction of stations.
According to Zhivodar Terziev, there is a problem with the indicated for another ecological fuel – hydrogen. We had two or three hydrogen stations, and for technological needs, not for charging cars.
The association stressed that they are not against the development of the infrastructure with charging stations for electric cars, but warn that Bulgaria will not cope with too heavy EU requirements.
Therefore, they propose to include mobility plans throughout the country in the revised recovery plan. Another idea of the association is to envisage a grant scheme to support infrastructure and technologies such as the construction of gas, hydrogen and charging stations. The subsidies had to cover 60-90% of the necessary investments, because it was not a question of market principles, but of administratively imposed obligations.
Bulgaria could request and not apply for a certain period the environmental component in the price of fuels, because the social and economic price will be too high at the moment. Our country had the highest share of emission reductions in Europe according to the values of the Paris Climate Agreement and this could be used as a good negotiating instrument. In addition, Bulgaria has the right to veto the environmental component.
The oil association insists on the introduction of a smooth schedule for raising the excise tax, so that households and industry can predict their costs and there will be no shock price rise after the crisis period.
We do not want to draw apocalyptic pictures, but to think about how the transition to green technologies should be socially tolerable, said Andrey Delchev – executive director of the association.
according to him
propane-butane
and methane should
to stay as
transitional fuels
at least another 20 years,
and to keep biofuel-powered internal combustion vehicles as long as possible and to improve them to emit less carbon.
He could also try hydrogen fuel production at the Lukoil Neftochim refinery in Burgas and the Kozloduy NPP. Another measure proposed by the association is to introduce a requirement for domestic transport in enterprises, ports and airports to be only with electric vehicles and to set pilot projects for public transport in Sofia with hydrogen. This would not shift the full burden of EU environmental requirements on households.
Tihomir Bezlov, an expert at the Institute for the Study of Democracy, pointed out that the shock rise in fuel prices could cause a sharp rise in the share of the gray sector. He gave an example of how there was a similar phenomenon with cigarettes in 2010, when the excise tax was raised sharply and smuggling reached about 40%. According to estimates, the share of the illegal fuel market in the country is about 12-15%. This means that about 6 billion liters 1 billion were sold without paying taxes.
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