In case Russian energy company Gazprom and Bulgaria sign a new natural gas supply agreement, gas prices in Bulgaria are going to increase as soon as 2007.

Bulgarian companies should start preparing for a 15 to 19 per cent price increase, Capital newspaper reported.

Price changes are to happen if the ruling coalition approves the memorandum drafted by Economy and Energy Minister Roumen Ovcharov. The memorandum is to be effective in place of the current agreement between Bulgaria and Gazprom and will be valid until 2030.

In the end of 2005 Gazprom demanded changes to the natural gas supply and transit passage agreement with Bulgaria. Changes were to become effective in 2006 and were going to result in higher natural gas prices.

Negotiations with Russia have been going on during the past year. As a result of the talks Ovcharov came up with two strategies.

One of the strategies involved keeping the current contract, valid until 2010, unchanged.

The second option involves changes to the transit gas passage agreement and the taxes related to it. Capital reported that Ovcharov demanded support for the second option.

The memorandum envisions gradual price increase until 2012. An initial increase is to occur in 2007.