Bulgaria imposes tax on Russian gas, Russia’s two allies Serbia and Hungary react angrily

The Bulgarian government will soon negotiate with its European partners on imposing a new tax on Russian gas flowing through its territory, it said Wednesday, a move that expectedly angered Serbia and Hungary.

Late last week, Bulgaria imposed a special “energy tax” of €10/mh on Russian gas transported through Bulgaria. As expected, this triggered strong reactions from Serbia and Hungary, which continue to import much of the blue fuel through the continuation of the Turkish Stream gas pipeline through Bulgarian territory.

“We are ready to hold initial talks with the representatives of the European Commission, Hungary and Serbia. There is a European Council coming up, where I will have the opportunity to talk to them. “We say that this tariff applies to the Russian company Gazprom, not to these countries (Hungary and Serbia) or to (the Bulgarian state-owned company) Bulgartransgaz,” Prime Minister Nikolai Denkov said.

Russia’s two allies, Hungary and Serbia, joined forces to react against this measure by Bulgaria, which is in line with punitive measures taken against Russia for the war started in Ukraine.

“This new Bulgarian regulation threatens the security of energy supply in Hungary and Serbia,” said the joint statement by Serbian Finance Minister Sinisha Mali and Hungarian Foreign and Trade Minister Péter Szijjártó.

The tax will increase Russian gas from “Turkish Stream” by 100 euros per 1000 cubic meters, 1/5 higher than the current market price. Who will pay the new fee has not yet been decided.

As energy expert Milos Zdravkovic told Euractiv, the Bulgarian parliament and the ruling coalition have taken advantage of the geopolitical situation in Europe to increase their budget by sanctioning Russian gas and introducing a tax that will hit Serbia and Hungary harder.

“We will have a stable gas supply, but the price will be higher.” This will affect the profitability of municipal power plants and industry. “From November 1, we are already planning to increase the price of gas by 10%, which will probably lead to a 20% increase in bills,” Zdravkovic says.

Russia will pay additional transit fees of almost 2 euros per Mh of gas transported through Bulgaria.

The new energy tax on Russian gas was introduced by Bulgaria’s special law implementing sanctions against Russia over its invasion of Ukraine.

Meanwhile, President Rumen Radev, whom opponents and Ukraine accuse of being pro-Russia, sharply criticized the government for imposing a tax on Russian gas, adding that the tariff destroys European solidarity in the case of Hungary and Serbia.

The president held positions close to those of Hungarian Prime Minister Viktor Orbán while governing Bulgaria with the interim government he appointed last year.

Radev did not support military aid to Ukraine, opposed joining NATO, unlike other countries in the region, and often referred to the Russian occupation as a “conflict,” all of which infuriated Kiev.

In April 2022, Russia unilaterally decided to cut off gas supplies to Bulgaria. At that time, there was no response from Sofia and transit to other European countries was not maintained. The interim government of President Radev never sued Gazprom over the suspended deliveries./The Geopost/