• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 9 hours EU has already lost the Trump vs. EU Trade War
  • 2 mins Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 4 hours Climate Change Consensus Shifts in Wind, But Gas Is Still the Right Move
  • 17 hours Judge Orders Trump To Release Tax Returns
  • 6 hours World oil demand will keep growing until 2030, climate-damaging emissions longer, says IEA
  • 12 hours Shale Gas News – November 9, 2019
  • 14 hours ''Err ... but Trump ...?'' #thedonkeystays
  • 8 hours Does .001 of Atmosphere Control Earth's Climate?!
  • 1 hour Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 1 hour Iran's Master Plan?
  • 16 hours The lies and follies of the "cry wolf" enviros: No more fire in the kitchen: Cities are banning natural gas in homes to save the planet
  • 8 mins Iran Finds New Oil Field With Over 50 Billion Barrels: Rouhani
  • 8 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 15 hours CHK Trading @ 90 Cents

Breaking News:

The One Fuel To Watch This Winter

Alt Text

Why Are Natural Gas Prices Crashing?

Natural gas inventories remain remarkably…

Alt Text

European Gas Prices Fall To One-Decade Low

European gas prices fell to…

Jen Alic

Jen Alic

 

More Info

Premium Content

Power Prices Bring Down Bulgarian Government

Fuel prices can bring down a government, as the Bulgarian elite are now learning, and it doesn’t stop there.

As tens of thousands of people hit the streets in Bulgaria and engage in bloody clashes with the police over rising power bills and corruption, the government’s resignation isn’t enough and the streets are still seething, with at least 25 people wounded in the clashes.

Late last week, the Bulgarian government thought the mass protests-turned-riots would dissolve when the Parliament accepted the resignation of Prime Minister Boiko Borisov and his cabinet. Not so—the protests are economic, not political (at least, they have not visibly been hijacked by political opposition figures—YET). 

This week, President Rosen Plevneliev will appoint an interim government, but the protests continue unabated. The public is prepared to keep up the pressure until new elections can be held in April or May—and until they see decisive movement first and foremost against foreign-owned electricity distributors. 

Related article: How Low Wages can Lead to High Oil Prices

Bulgarians were not seeking a regime change, per se, they were demanding that something be done about rising power bills, wages and government corruption. 

To put this into context, protests on this violent scale are unprecedented in post-Communist Bulgaria, and there is fear that the sentiment could spread to other countries in Eastern and Southeastern Europe.

Among other things, Bulgarians would like to see an end to monopolies like that over electricity distribution, which they see as the root cause of increasing power bills.

Not only is the capital, Sofia, overrun with protesters, but the Black Sea city of Varna has seen daily rallies for the past 15 days. The largest protest was on Sunday, after the government’s resignation. As many as 40,000 protesters demanded the resignation of Varna Mayor Kiril Yordanov, whom they accuse of running the local economy with the Mafia. Thousands of protesters gathered outside Varna’s utility monopoly, Czech Energo-Pro (CEZ), on Sunday.  Protests against the Czech power distributor occurred in other cities as well.

Borisov had already promised to cut electricity bills by 8% beginning in March and to revoke CEZ’s license, but it was not enough to stop the protests. Bulgaria’s energy regulator earlier this month began the process of stripping CEZ of its licenses, saying it had evaded public procurement law, among other abuses.

Related article: Why is the Washington Post Surprised at High Gas Prices?

Since then, however, authorities have said that prices could not be cut before April—at the earliest—and that CEZ’s license would not be revoked, but some other compromise would be sought.

Of course, the Czech Republic will fight to keep any of this from happening. CEZ has vowed to defend its licenses by all legal means, and insists that only a full liberalization of the electricity market will help to lower high prices.

Bulgaria is the poorest country in the European Union, and rising power bills have come along with a freeze of public wages that is exacerbating the situation. The average monthly salary in Bulgaria is about $534. The country’s standard of living is only about 45% of that in other EU countries.

Protesters countrywide are calling for an end to electricity monopolies, an end to the value-added tax (VAT) on electricity and a review of all energy privatization contracts.

While economic in nature, the protests will necessarily be political, and the Socialists are likely to be the biggest winners in fresh elections that are just around the corner now. After all, the main point of the protests is that the public wants electricity distribution to be renationalized, which will not go down well in the Czech Republic, home of CEZ, or in Austria, which owns another key distributor in Bulgaria, EVN.

By. Jen Alic of Oilprice.com




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play