We have developed a mechanism for energy compensation and its financing in a draft law implementing the European regulation to tackle high energy prices. This was stated by Deputy Prime Minister for Economic Affairs and Minister of Transport and Communications Hristo Alexiev at a meeting of the Energy Crisis Staff on 13 October in connection with the launch of the public consultation process on the mechanism for implementing Council Regulation (EU) 2022/1854 of 6 October 2022.

The draft is tailored to our national energy system and the specificities of the Bulgarian market. This continues the good and close cooperation between the state, trade unions and business, which has resulted in a significant reduction in the price of natural gas, Deputy Prime Minister Alexiev added.

The proposed mechanism is temporary, like the European regulation - it is expected to last until July 2023. The first is the predictability of the price of electricity, heat and natural gas for the household. This will give them the peace of mind that they will be able to afford lighting and heating and will not have to change the type of heating in the middle of the heating season, the Deputy Prime Minister said. He stressed that the regulated electricity market for household consumers is maintained.

The mechanism will be financed through solidarity contributions from all electricity producers. Excess profits of the producers will be taxed and the funds received will be used to compensate those who need them. Consumers of electricity, gas and heating who have public functions - schools, kindergartens and nurseries, nursing homes, etc., will find support to continue to perform their functions in peace, assured Hristo Alexiev.

The representatives of the sectoral organisations pointed out that the adoption of such a law is inevitable and necessary, but within the framework of the discussions, the details of the proposed mechanism should be considered so that it is easily and transparently applied. Businesses welcomed the transparency in the negotiations with the state on the supply of natural gas, which led to a significant reduction in the price of the blue fuel. They expressed confidence that, also on the issue of the energy compensation mechanism, the cooperation between the State, business and trade unions would lead to benefits for market participants and consumers.

Source: Council of Ministers of the Republic of Bulgaria