site.btaLukoil Refinery Logistics Costs Have Increased Tenfold During Ongoing Crisis, Energy Minister Says

Caretaker Energy Minister Traicho Traikov said on Tuesday that logistics costs for the Lukoil refinery in Burgas have increased by around ten times compared to pre-crisis levels. He made the statement after a meeting of the crisis task force monitoring and controlling fuel and basic commodity prices amid tensions in the Middle East.

Traikov said the information had been provided by customs representatives and the refinery’s management. This has already been reflected in fuel prices, he added, noting that it explains why prices are significantly higher compared to the pre-crisis period.

According to him, traded fuel volumes have not decreased, and against the backdrop of higher prices this provides a buffer for maintaining the financial stability of all participants along the supply chain.

Traikov said the refinery’s supplies are secured until the end of May and partly into June, which is also a function of the company’s working capital.

He also commented on the planned shutdown of the Maritsa East 1 Thermal Power Plant in May due to the expiry of its contract with the National Electricity Company. According to him, this had been known before the caretaker government took office and is unlikely to occur during its term. He said that from the perspective of generation capacity, Maritsa East 2 TPP can take over the capacity that is to be shut down at Maritsa East 1.

Traikov also said that key points in negotiations with the Turkish side on the BOTAS contract should include volumes, capacity pricing and flexibility in response to changing market conditions.

According to him, the use of this contract is currently too expensive and, all else being equal, would not be the preferred option. He believes the philosophy of the contract allows for it to be highly beneficial if its parameters are calibrated.