On Thursday, Rumen Radev, the president of Bulgaria, attended a meeting with Vadim Vorobyov, the CEO of Lukoil Bulgaria, where the topic of gasoline pricing was discussed. The Russian company expressed alarm at the same time on the European oil prohibition on Russian oil.
Radev complimented the Lukoil representatives for the company’s contribution to the nation’s economy as a significant employer and fuel producer. Radev focused primarily on the high fuel cost and ways to lower it.
According to his press office, the president told the Lukoil representatives, “I consider that your upcoming meeting with the Bulgarian government is a good opportunity, of course strictly following market mechanisms, for the identification of measures to stabilise the economic environment and to fight inflation for the benefit of the Bulgarian consumer”.
European sanctions are in place against Lukoil due to Russia’s invasion of Ukraine. In the meantime, Radev’s caretaker government has reversed its position on major Russian corporations operating in the nation and has begun discussions about restarting gas supplies from Gazprom.
According to Radev, rising fuel costs are one of the leading causes of the increase in the price of all goods and services, which causes a reduction in consumption.
Bulgaria only has one refinery located in the port city of Burgas. Despite its significant turnover of more than €3 billion per year (in most years) and its dominant position in the market, Lukoil avoided paying taxes for years by reporting considerable losses.
The company between, 2006 and 2020 reported only three profitable years. (2007, 2016, and 2017). Every other year, enormous losses were reported, such as in 2020, when the company announced a loss of almost €255 million and little profit.
Behind the three companies, there is only one owner. The Bulgarian company only works on the basis of piecemeal, that is, by refining oil, and the broker’s objective is to earn cheaply and sell expensively. Thus, the profit’s significant amount remains in Russia.
The refinery in Burgas was supposed to be modified by the previous government to operate without Russian oil. Meanwhile, it became clear that the caretaker government would use the derogation.