Lukoil Bulgaria may suspend operations over planned legislative changes

Sofia, May 11 - Neftegaz.RU. Lukoil Bulgaria may suspend operations due to proposed legislative changes requiring it to split its single tax warehouse into separate regional units, director general Bulat Subaev said, local SeeNews reported.

"Given the deadlines, the amount of work required and the practical impossibility of meeting them, the danger of stopping work is real," Subaev said in an audio file posted on the website of public radio BNR.

Amendments to the Excise Duties and Tax Warehouses Act, proposed by the government on May 5 as part of a bill for changing the Health Act in the context of the coronavirus pandemic, oblige operators of oil pipelines located on the territory of more than one customs office to apply for separate licences with each one of these offices within a month after the adoption of the act.

Lukoil Bulgaria, the operator of the Burgas oil product pipeline, will have to split its single tax warehouse into seven separate regional units, Subaev said.

"Revenues in the budget do not depend on how many tax warehouses our infrastructure will be divided into - nothing will be added to the Treasury from the division itself. And secondly - this will entail huge investments and administrative costs," he noted.

In an opinion on the proposed legislative changes posted on the website of Bulgaria's parliament on May 7, Lukoil Bulgaria says it considers them to be directed against its interests and requests their removal from the Health Act amendment bill.

The Bulgarian Petroleum and Gas Association on May 7 urged the government to withdraw the bill, stating that the changes were not discussed with representatives of the sector and would require significant investments by the companies in times when their revenues are rapidly declining.

"Not all warehouses will be able to implement the projects on time. Some of the warehouses may close, filling stations will be supplied from a more distant location. Tolls and transport costs will increase, and this will likely be reflected in the fuel prices," the president of the Bulgarian Petroleum and Gas Association, Zhivodar Terziev, told BNR on May 8.

Author: Radomir Ralev