Bulgarians, Romanians face utility price hikes

01/07/2008

Electricity and gas rates went up in Romania and Bulgaria on Tuesday. Bulgarians also saw increases in the cost of central heating and public transportation.

(Reuters, bTV, Standart, Nine O'clock - 01/07/08; Dnevnik, Rompres, Mediafax - 30/06/08; The Sofia Echo - 27/06/08; Reuters, AP, Mediapool, The Sofia Echo - 26/06/08)

Bulgaria's government announced sweeping hikes in state-controlled electricity and heating rates, to offset rising international fuel costs. [Getty Images]

Bulgarian households will be paying an average of 14% more for electricity as of Tuesday (July 1st). Heating, gas and rail transport prices also rose in the EU's poorest nation. Furthermore, the price of a one-trip public transport ticket soared by 43% in Sofia.

Announcing the new power prices, the state energy regulator said last week that the increases stemmed from rising international fuel costs, but were lower than those sought by the utility companies. Bulgaria's gas company, Bulgargaz, was pushing for a 19.6% natural gas hike. The State Energy and Water Regulation Commission (SEWRC) approved only a 5.16% increase.

The average 14% electricity price hike was also 4% lower than the one initially considered by the regulator, SEWRC head Kostantin Shushelov said on Thursday. Of the three different electricity distributors operating in the country, E.ON won approval for the highest raise of 17.7%.

Bulgarians will also be paying on average 13% more for central heating as of Tuesday. Residents of the northern city of Ruse face the highest increase, 19.4%.

On Tuesday, the Bulgarian Railway Company raised the prices of train tickets by 9.19%, following a move by bus lines, which already passed on their soaring energy costs to riders.

The power price increases have prompted concerns of further pressure on consumer prices, which rose a 15% record year on year in May. Bulgarians anticipate that they will have to cut other expenses, including for food, to afford a summer vacation.

Similar concerns arose in Romania, where state-regulated gas prices rose by 12.5% on Tuesday, while those of electricity rose by 4.4%. The most recent natural gas rate hike was in February, an increase of 8.5%, according to the state news agency, Rompres.

It quoted the country's National Energy Regulatory Authority (ANRE) as justifying the markup by the increase in gas acquisition prices between January and August. The agency also seeks to ensure continuity in the supply of natural gas and the buildup of winter stocks.

Reports suggest that E.ON Gas and Distrigaz Sud, the two largest gas distributors operating in Romania, had been pushing for an increase of 25%, more than double the one that regulators eventually approved. The last electricity rate hike in Romania was in April 2007, when prices went up by nearly 4% on average.

According to the Romanian English-language daily Nine o'clock, the higher utility prices are likely to raise the price of foodstuffs by between 5% and 15%. Owners of hotels at Romania's seaside resorts are likely to raise room rates up to 30% per night.