State-owned company Bulgargaz projects the gas price to fall by 0.5% as of Q2, according to its preliminary calculations, local media reported. The decrease of the price is due to expected lower import gas price during the quarter, Bulgargaz added. In case of new developments related to the gas price-setting factors in the next month, the projection may be amended. Bulgargaz will submit its final proposal for a new gas price for approval to the utility regulator on Mar 8. KEVR will take the final decision on the energy prices by end-March.
A potential slight decrease in gas price will not have a visible impact on headline inflation, in our view, as gas consumption has a low share in the consumer basket. Moreover, a minor decline in the gas price will not be reflected into the electricity or district heating prices either. Nevertheless, we think the maintenance of gas and utility prices at their present level will alleviate social tension in regards to energy prices, which intensified during the autumn.