By imposing a tax on the transit flow of Russian gas through its territory, Bulgaria has caused a new wave of instability in the already troubled European gas market. This was reported by Bloomberg.
According to the law published and entered into force, Bulgaria will receive a tax of 20 levs ($10.76) per megawatt-hour of Russian gas transported in transit. This is around 20% of the cost of gas at the European hub in Amsterdam.
Although Bulgaria does not import Russian gas for its own needs, a significant part of its pipeline supplies to Hungary, Serbia and other Southern European countries pass through it. The new tax adds uncertainty to a market already turbulent due to the threat of supply disruptions.
The purpose of the law is to enforce EU sanctions against Russia and increase Bulgaria’s budget revenues. However, Hungary had already criticized this decision as unacceptable and contrary to European solidarity.
It is unclear how the new tax will affect other market participants. If Moscow deems this illegal, a new gas dispute could be triggered, further exacerbating already high price volatility.
At the end of September, the chairman of one of the EU’s largest energy companies appreciated The situation in the fuel market.
Previous Analyst appreciated Russia’s role in the European gas market.