About 51.2 per cent of Bulgarians expect that an increase in the price of natural gas will push up costs for households, while 44.7 per cent expect an effect on the prices of goods and services, according to a poll by Alpha Research done for Bulgarian National Television.
The results of the poll were announced on the night of September 25, three days before the regulator makes a decision on the natural gas price.
Talk of expected consumer price rises has been a political football in Bulgaria of late, fuelled by minority party politicians and media reports that have verged on the alarmist – possibly a factor in the poll results.
Much of the speculation has been based not only on reports about the “expected” natural gas price increase, but also by reports about Bulgaria’s rainy June and July pushing up prices of bread, vegetables and fruit.
With the rainy weather having lowered the wheat yield, though not to problematic levels to the point that the country has too few supplies, Prime Minister Boiko Borissov’s government has been keen to try to be seen to act. Agriculture Minister Roumen Porozhanov said some days ago that the government had asked major retailers to forego their own profits to keep the bread price from rising sharply.
Seizing on a populist political issue, opposition Bulgarian Socialist Party leader Kornelia Ninova spoke of slashing the value-added tax rate on bread, a move that simple logic would suggest would have negative consequences outweighing any imagined benefits.
Krassimir Karakachanov, a deputy prime minister in Borissov’s government and co-leader of government minority partner the United Patriots, came up with suggesting fixed profit margins for producers and traders to keep down prices.
Finance Minister Vladislav Goranov, of Borissov’s GERB party, dismissed any idea of lowering value-added tax on bread, underlining that the ruling coalition had assumed and would fulfil its commitment not to change taxes.
Borissov, in New York for the UN General Assembly September 2018 opening session, told reporters that he had ordered Goranov and Karakachanov to speak to each other on the topic of the possibility of limiting the profits of producers and traders on essential necessities.
Borissov said: “I understand all my colleagues, because elections for the European Parliament are coming, and everyone is struggling to come up with more exotic ideas, and I do not know how we set the price cap.”
Using the opportunity to raise one of his pet topic, an ambition for Bulgaria to host a “Balkan gas hub”, Borissov said: “Only the gas hub will save us”. According to Borissov, the gas hub would create an opportunity for competition among suppliers “and the Bulgarian economy and consumers to have the opportunity to buy at the lowest price”.
Ninova raised the topic again on September 25, telling a news conference that a “price shock” was expected after the increase in natural gas and this required “urgent measures” to help the poorest.
Were her party to be in power now, it would take various steps, including increasing the number of families eligible for heating aid and increasing the sum involved, Ninova said.
All of this talk continues although, as noted, no decision has been made. Energy and Water Regulatory Commission head Ivan Ivanov said on September 25 – against a background of supplier Bulgargaz planning to hike the natural gas price for end-suppliers by 14 per cent (which in turn led some media to speculate that the end-user price hike would be the same) – that the price increase for end-users would be no more than eight per cent.
There also has been talk that heating and hot water prices would go up. Ivanov also said that electricity prices in Bulgaria would not change on October 1. This too came against a background of speculation in the media that a natural gas price increase would result in an electricity price increase.
(Photo: Frances Magee/freeimages.com)