HomeMediaMedia PublicationsAnalyticsAnother Russophobic trick of Bulgaria

Another Russophobic trick of Bulgaria

20 November 2023

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

The Monocle magazine (No.5 (1321), November 20-26, 2023) published an interview with Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, on the causes and consequences of the Bulgarian tax levy introduction on the Russian gas transit and import.

— Gazprom and the recipients of Russian gas in Serbia, Hungary and other countries are likely to refuse to pay this fee. It is characteristic that Gazprom tries not to comment on this issue at all. And the Serbs and Hungarians expressed their extreme indignation at the highest level. But regardless of whether individual companies will comply with such a requirement or not, the case undoubtedly has a judicial perspective, and, perhaps, a class action will be filed against Bulgaria. Hungary has already sent a letter to the European Commission demanding to open a case against Bulgaria on the illegality of its actions from the point of view of the EU norms, threatening to file a lawsuit in the EU court.

The Bulgarian levy obviously contradicts both the transit contract (it clearly sets out all the terms of supply) and the WTO rules, since it is imposed only for gas supplied from Russia and is not related to ensuring national security and other exceptions allowed under the WTO. But the Bulgarian law is formally included in the sanctions package of measures related to Ukraine, which I think was done intentionally to put future judges before a political choice, since from the point of view of general norms of international law, Bulgaria's position is more than shaky.

— What is the motive of the Bulgarian initiative?

— There is no justification for the decision in the law itself. Most likely, it does not exist: this measure clearly and quite strongly stands out even from the general EU sanctions policy, which diligently bypasses gas issues. Half of all Russian pipeline gas supplies to the EU and the countries of the former Yugoslavia now pass through Bulgaria. In 2022, 11.6 billion cubic meters were pumped to and through its market, and in 2023, according to my estimate, supplies will amount to about the same 12 billion cubic meters. Thus, the annual amount of the collection can reach 1.2–1.3 billion dollars. Taking into account the chronic deficit of the Bulgarian state budget, this is more than a tasty morsel.

Secondly, this is undoubtedly a kind of revenge against Gazprom for refusing direct gas supplies to Bulgaria starting on April 26, 2022 (when it refused the so-called transfer of payment in rubles). Replacing Russian gas has not been easy for Bulgaria.

And thirdly, it is very similar to settling accounts with neighboring countries — Hungary, Serbia and Northern Macedonia, to each of which Bulgaria apparently has its own account. They may eventually become the main victims of this collection.

— Does the current conflict affect Turkey's interests?

— Strangely enough, Bulgarian radicalism plays into the hands of Turkey as a whole. Despite outwardly friendly relations with Moscow, Ankara is clearly eyeing the possibility of using the Bulgarian gas transportation system, including the Balkan Stream, for its own gas exports in the long term (more precisely, for re-exporting Russian or Iranian gas under a Turkish trademark). Therefore, the less direct Russian gas supplies go to the border with the EU and the more difficulties these supplies face, the higher the chances of Turkey becoming a gray re-exporter, playing the role of a politically neutral intermediary between Russia and the EU. Unfortunately, it cannot be said that such a scenario is impossible. 




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