Bulgaria's State Energy and Water Regulatory Commission (SEWRC) could be forced to sanction steeper natural gas and central heating price hikes, the regulator's chairperson Konstantin Shoushoulov said on December 22. The hikes would go into force on January 1 2009.

Initially, SEWRC planned to accept a gas price hike of 11.7 per cent, even though state-owned gas distribution firm Bulgargaz has demanded an increase nearly double as high - 21.3 per cent. Central heating prices, in turn, would then rise by an average 15 per cent, ranging from four percent in Bourgas to 16.6 per cent in Sofia, according to the regulator's plant.

But SEWRC will now have to amend its proposal to include Bulgargaz' costs of storing gas at its Chiren storage facility. With heating utilities relying heavily on natural gas as one of their main energy sources, a higher increase of gas prices would also boost heating prices.

Heating utilities have amassed large debts to Bulgargaz because they were not allowed to raise prices last year, while gas prices continued rising steadily, but are far from happy with the price hikes.

On one hand, they are not enough to cover the losses, and on the other, with central heating prices approaching electricity prices, an increasing number of consumers could make the switch, according to the chairperson of the heating utilities association, Valentin Terziiski, as quoted by Dnevnik daily.

The only solution, according to Terziiski, was for the Government to subsidise the utilities to keep them afloat.