by Krassen Nikolov
Bulgaria received a derogation from European sanctions in December, which allows such exports until the end of 2024.
“This is necessary to limit environmental and safety risks, as such products cannot be stored safely in the country,” the government said in a statement on Wednesday.
EURACTIV’s sources commented that the government’s announcement means that the refinery of the Russian company Lukoil in Burgas produces too much fuel, and as there is no more storage capacity locally, it must be exported.
Earlier this month, EURACTIV published its own investigation, which showed that Ukraine had bought a huge amount of fuels from Bulgaria that was produced from Russian oil. This is according to the data of the Bulgarian National Statistical Institute provided to EURACTIV Bulgaria.
From January to November 2022, Bulgaria exported €700 million worth of fuel to Ukraine, and if the trend continues in December, the total value for the year will exceed €825 million.
Over 90% of the gas delivered from Bulgaria to Ukraine is gas oil (mainly transport diesel). Gasoline supplies have also increased rapidly over the past six months, which is explained by Russian attacks on Ukraine’s critical infrastructure.
Bulgarian statistics show that the fuels from Russian oil were produced in Bulgaria because the import of gas oil in the country is several times lower than the export to Ukraine. De facto, the only producer of gas oils (including diesel) in Bulgaria is the refinery in Burgas, owned by the Russian oil company Lukoil.
The refinery still runs on Russian oil brought in by tankers across the Black Sea. The Russian refinery can afford to export fuel at significantly lower prices because it works with its own raw material.
The Russian company claims it sells the fuel to nearly 500 Bulgarian companies and does not work directly with Ukrainians. The data show that if exports to Ukraine are stopped, the Lukoil refinery will continue to operate only for the Bulgarian market, which is too small for its production capacity.
The remaining fuel producers in Bulgaria produce negligible amounts, mostly biodiesel, which is marketed in the EU. In the year before the war, Bulgaria exported more than 1000 times less fuel to Ukraine, with a total value of only €750,000. The current scale of Bulgarian oil exports to Ukraine is so large that it corresponds to about 1% of the size of the entire Bulgarian economy
By: N. Peter Kramer
