The new natural gas provision and transit passage memorandum Bulgaria signed with Russian energy company Gazprom is to affect the prices of export production of major companies.

Major natural gas consuming companies could be affected by the expected increase in the price of gas in 2007, Economy and Energy Minister Roumen Ovcharov said.

Companies exporting to foreign markets were dependent on production prices, which in turn determined the value of the final good, said Ovcharov. As a result the expected hike was going to play a role in determining final prices, said he.

In December Bulgaria’s Bulgargaz and Gazprom signed a memorandum, envisioning gradual increase in the price of natural gas over the coming years. The memorandum is valid until 2030.

On December 21 Ovcharov met company representatives to discuss the items in the memorandum. To avoid any confusion Gazprom is to present price changes predictions on a regular basis, Bulgarian National Radio reported.

Major natural gas consumers were to receive such prognoses a month before the end of each annual quarter, when prices are usually announced.

Starting April 1 2007, natural gas is to become more expensive by no more than 10 per cent Ovcharov said. Another hike was expected on July 1, when the price was to increase once again by nearly four per cent.

Photo courtesy of Gazprom