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Bulgarian Energy Minister Demands Lukoil Cartel Probe
Date: 03/08/2011
Bulgarian Energy Minister Demands Lukoil Cartel Probe

Bulgaria's Economy and Energy Minister, Traiko Traikov, has requested a probe of the Commission for Competition Protection, KZK, into a possible monopoly on the jet fuel market in the country.

The information was announced by Traikov in a Wednesday interview for the Bulgarian, National Television, BNT, saying the probe stems from the case with the revoked license of the Lukoil Bulgaria company, which the Sofia City Administrative Court reinstated Monday.

The Minister pointed out the magistrates' motive to reinstate the license over the fact a closure of the Lukoil refinery, which is the only one in the country, would mean shortage and lack of kerosene for the airports, is a good enough reason to look into a possible monopoly situation.

In its August 1 decision, the Court further says the license revocation would inflict significant losses because the company has contracts for fuel supply to the State Railroads, BDZ, and the public transportation in Sofia.

Traikov stressed during the interview that there is plenty of fuel, but anticipation of court decisions has stirred insecurity with smaller importers being nervous about purchasing large volumes without knowing if the Lukoil license will be reinstated.

On Monday, the Sofia City Administrative Court (ACSC) stopped the preliminary execution of the Customs Agency decision on the withdrawal of Lukoil's license and the closure of the only refinery in the country.

The crude oil processing plant in the Black Sea city of Burgas can work under the conditions preceding the punitive measure of ACSC until the Supreme Administrative Court (VAS) decides on the appeal lodged by the Customs Agency.

According to a report of the state-owned TV channel BNT, little after Lukoil was officially given the green light, the tanker terminal started servicing incoming and outgoing oil tankers.

After the refinery was stripped of its license, over the failure to install electronic measuring devices, the oil processing installations of the plant were switched into hibernation mode, which allowed it to start working at full capacity within 8 hours after the Court permit.

Although Lukoil resumes operations at full steam, customs inspectors will keep monitoring the refinery and the Rosenets Oil Terminal, as well as a number of other sites, as announced in July.

Customs units will continue to keep track of the volumes of unloaded crude oil and of final products sold by the refinery and send reports to the Customs Agency headquarters in Sofia.

The Lukoil saga drew widely divergent reactions from legal experts, with some saying that the preliminary execution ruling takes effect immediately, while others insisted that the act of the Administrative Court Sofia City did not enter into force until the 7-day appeal period expired.

According to a statement of the ACSC, "The (two) rulings have not taken effect, they can be appealed through an interim appeal filed within a seven-day period before the Supreme Administrative Court."

On the other hot topic, the Minister confirmed the Tuesday statement of the Head of Bulgaria's National Electric Company, NEK, Mihail Andonov, who said Bulgaria expects that by the end of the day Wednesday Russia's state nuclear company Atomstroyexport will withdraw its EUR 58 M claim at an arbitration court over delayed payments for its work on two nuclear reactors.

"I remain optimistic that whatever happens it would happen for good. If the project to build a second Nuclear Power Plant in the Danube town of Belene materializes, it will be a fine project and facility; if it does not materialize, it means it wasn't fine," Traikov explained, but declined offering a forecast on the possible outcome from a court battle between Bulgaria and Russian over Belene.

"We are a constructive partner, full aware of its interests and standing firmly by them. It is possible that the State will finally decide to send the bulldozers to clean the Belene construction site and to build something new there," the Minister concluded.

Topic: Business

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