Bulgaria’s Parliament votes resolution limiting exports of some fuel products
Bulgaria’s Parliament voted on October 31 to approve a resolution hastily tabled by the ruling majority to impose restrictions on the export and intra-community supplies to other European Union countries of fuel products, mainly diesel and aviation fuel.
The resolution, tabled against the background of US sanctions on Russian fuel giants Rosneft and Lukoil – the latter has Bulgaria’s only refinery – was approved with 135 votes in favour, four against, with 42 abstentions.
The votes in favour came from Boiko Borissov’s GERB-UDF, Delyan Peevski’s Movement for Rights and Freedoms – New Beginning, opposition We Continue the Change – Democratic Bulgaria and government minority partners the Bulgarian Socialist Party – United Left and ITN.
The votes against came from nationalist-populist Velichie, while opposition pro-Russian party Vuzrazhdane and nationalist-populist Mech registered abstentions.
The item was not initially on Parliament’s Order Paper for the day but was added at the request of the ruling majority, which also had convened an urgent meeting of the budget and finance committee on Friday morning to approve the resolution.
MPs rejected a proposal, tabled by WCC-DB, to add to the October 31 Order Paper a hearing of the energy, finance and economy ministers, as well as the head of the State Agency for National Security, on the state of the country’s fuel reserves.
Announcing the resolution, GERB-UDF MP Delyan Dobrev, head of the budget and finance committee, described it as “a preventive action against the speculative increase in fuel prices. We want to prevent panic in the fuel market”.
The opposition countered that with this rush, it is the ruling party that is creating panic.
From Dobrev’s words, it was understood that there is data from the Customs Agency about a drastic increase in diesel fuel exports after the announcement of US sanctions on Lukoil’s assets, which also include the Bourgas refinery.
“These exports are growing every day, there are interested parties who are trying to speculate on this. We also see what is happening in Serbia with fuel prices, they are going up,” Dobrev said.
The authorities have assessed that only diesel and aviation fuel can be subject to a temporary export ban, because over 80 per cent of fuel consumption in Bulgaria is diesel fuel.
“The production of petrol is large enough and cannot be consumed by the domestic market, so its export remains free, thus the work of the Lukoil Neftochim refinery will not be hampered,” Dobrev said.
Control over the ban on the export of diesel and aviation fuel will be carried out by the Customs Agency and the National Revenue Agency.
Several exceptions are foreseen, under which the director of the Customs Agency may permit the export of both types of fuels.
These are in connection with international treaties, humanitarian aid, prevention of harm to Bulgarian economic operators, maintenance of continuity of production and justified necessity of public interest. The ban will not apply to supplies related to the defence forces.
The opposition was left puzzled as to why there needed to be so many exceptions, some of which sounded too general.
As a result, a text was voted on according to which any exceptional export permit must be reported by the director of Customs to the National Assembly, and MPs must respond within seven days whether they have any objections.
At the committee meeting, former finance minister Assen Vassilev, leader of WCC, asked: “Is there an opinion of the Cabinet on the admissibility of this ban?”
Vassilev said that the European Commission may sanction Bulgaria for the ban on intra-community supplies, even though they are justified by protecting the country’s national security.
“Half of the fuel reserves are outside Bulgaria, won’t we receive retaliatory measures and not be able to collect this reserve if necessary?” Vassilev said.
In the final version of the resolution, which was amended on the House floor, the National Assembly assigned the Chairman of the State Agency State Reserve and Wartime Stocks to conduct an inspection of the stored quantities of oil and petroleum products by November 7.
In debate in the House, Dobrev, addressing WCC-DB, said: “We have fuel for six months, and you come out here like you’ve never run this country and say seven days.”
WCC-DB MP Bogdan Bogdanov described the situation as a panic reaction: “One of Bulgaria’s most significant industrial assets is currently on the table. It’s not just the Lukoil Neftochim Bourgas refinery, but also the accompanying infrastructure.”
Tsoncho Ganev of Vuzrazhdane said that the ruling majority was introducing a solution that does not guarantee long-term fuel security.
“You are introducing decisions that show panic. Most likely, the refinery is about to be closed due to sanctions. What explanations will you give after the 20th and where exactly will you buy fuel from?” Ganev said, referring to the November date when the US sanctions take effect.
Yordan Tsonev of MRF – New Beginning that the actions are based on public data on trends in the European market after the sanctions were imposed.
Tsonev said that there is no data on panic on the Bulgarian market and there are three months’ worth of fuel stocks in the retail network: “Bulgaria is quite vulnerable and we will take all necessary measures to prevent a fuel crisis in Bulgaria. Next week there will be other measures in this regard.”
The Association of Fuel Traders and Producers reacted with astonishment to the motives for imposing the ban.
“Fuel prices are not determined by one refinery or another. This is an exchange-traded product. Even if we stop the export of diesel to maintain an increase in its price, we cannot stop the growth of international prices,” Dimitar Hadzhidimitrov, chairman of the association, told Nova Televizia.
Hadzhidimitrov said that decision would only lead to difficulties for the Lukoil Neftochim refinery, which was full of diesel and will stop operating because it will have nowhere to store it after the export ban.
(Photo: Kiril Havezov/ sxc.hu)
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