EU green transport policies will develop the black market in fuel imports from Turkey
Fuel prices on international markets are good news for producers on the one hand, and this is the maximum level of consumption on the other, especially for the still not well-active business climate. As early as June, the levels of $ 80 per barrel were reached. Black gold producers themselves do not want to increase yields to keep prices down. At the same time, they are enough seekers to realize their product. That’s why I think the levels of $ 74-80 a barrel are prices we’ll see in the coming months. This was explained to 3eNews and Dir.bg by Zhivodar Terziev, chairman of the Bulgarian Oil and Gas Association.
According to him, the Bulgarian retail market lagged behind by 25 to 30 days, compared to international prices in recent months.
“On world markets, prices are rising from February to the end of June. And due to political uncertainty, expectations of a pandemic and other factors, the Bulgarian market lags behind. So in early June we had some really low levels at gas stations, compared to adequate daily prices. was the main reason to share that if the prices on the international markets remain at these levels, it will be normal for us to see an increase of 5-6 stotinki in July “, Terziev explained.
He rejected the claim that millions of people traveling to the sea and on vacation have suffered from high prices.
“Last year there was a decrease in prices before the season. What we see now, removing excise duties and VAT and looking at prices in neighboring countries is obvious. It should be clear to everyone that prices in our country are very low and the consumer in the moment is taking advantage, “Terziev said.
At the same time, the companies in the sector have good turnovers compared to last year’s levels. At that time, these consumption levels were low due to the pandemic.
“Market expectations are mine as a trader in this market. They are not the result of any secret information and we want to have stable prices, with a sustainable market.”
Rising electricity prices have also hit fuel traders
The increase in electricity also has a serious impact on our business, the specialist explained.
“I imagine with concern what will happen in November and December, because we are currently paying three times more for electricity than last year. That is, if at the moment I have to pay three times more for electricity, I either have to close or increase prices “, Terziev specified.
Only high electricity prices immediately increase the conditional fixed costs, which leads to the need to look for ways to sustain the commercial site. Here, too, there are two options – one way is to process twice the amount of fuel to reduce the conditional fixed costs. And the other option is to increase the prices of the column.
“It is clear to everyone that there is no way to suddenly increase the turnover of a free fuel market twice, not without state support. And so it remains to increase maintenance costs and by raising mark-ups,” said the specialist.
According to him, under equal conditions and relatively one oil price, in the next few months we will have a slow rise. This will be due to the high fixed costs, which will be transferred to the price of the goods. “The situation is similar in the Association for Modern Trade, Light Industry. Just high energy prices will lead to higher prices. How much and how exactly this will happen I can not say. I hope that if we have a normal market environment and we get away without a serious lockdown, to be able to bear the increase within 2-3 stotinki per liter of fuel. But these are just my hopes, “said Terziev. According to him, however, there will be an increase in natural gas and methane – everyone can see how the price of this type of alternative fuels has increased in recent months.
And in the winter?
Experts are already talking about how after September 15-20 we can fall into a fourth wave of coronavirus. These factors will have a very negative impact on the market during the autumn-winter period.
“With a shrinking consumption, it is clear what will happen in the market. On the one hand, the less you sell, the higher your markup must be in order to survive. At the same time, if the turnover drops significantly, then it passes. in a “self-preservation regime” whose goal is simply to get through a difficult period.It is very difficult at the moment – until we see the result of forming a government and the desire or need to proceed to restrict public life.
And all this will happen at the beginning of the heating season in October and all these factors create many unknowns. Even at the end of August, it will be difficult to predict exactly what will happen by the beginning of winter in terms of prices.
European tax legislation and CO2
At the European level, everything revolves around carbon emissions, which have a negative impact on the Bulgarian energy sector. We started talking about harmful emissions at a price of 12-13 euros per ton. Now they are at levels of over 50 euros / ton. And the difference for a year and a half is about five times. Thus, the hypotheses in this policy will be clear in the next few years. However, one thing is certain: Europe wants to adapt to the plan to reduce carbon emissions by 55% by 2030, compared to 1990. This will achieve neutrality by 2050.
However, this neutrality will cost us money. It will be disastrous for some poor nations in the EU, even around the European Union, Terziev said.
And the steps by which Europe is implementing this whole event are no longer quick, but are at a gallop. Our expectations are for the consumer to be informed that “as green as we are and as beautiful as we are, there is a danger of staying” and so pedestrian and unable to move “.
I see the following in this plan, which will one day become enforceable through directives and measures. First of all, I expect the way of determining the excise duty to change in our sector. It will switch to carbon pollution – calorific value and gigajoules. This will raise prices on the one hand, Terziev believes.
At the same time, there is talk of carbon emissions and their purchase by businesses related to energy consumption in transport and buildings. That is, if you are a carrier, you will first have to pay a higher excise tax, and then buy allowances for pollution.
Rising prices for biofuels
The third part is a change in the assessment of the use of renewable or alternative fuels. What we have been calling biofuels for the last 10 years is now increasingly being called the food industry. And Brussels’ goal is to make biofuels from waste and pollution. And these prices are many times higher than normal biofuels. If we talk about the production of synthetic fuels from captured carbon dioxide and green hydrogen and replace up to 15-20 or even 100% conventional fuels in 2050, then we need to know a few things.
First of all, the production of hydrogen by electrolysis will cost about 6 levs per kilogram. If we assume that vegetable oils and alcohol will no longer be used for biofuels, if we will look for other sources for the production of carbon dioxide and green hydrogen with a lot of excess energy on sunny and windy days, then the prices we announced recently may even be optimistic, explains the chairman of BPGA.
“I will give just one example nowadays for the production of biofuel from vegetable oil as a first generation fuel such as rapeseed. The difference with second generation biofuels is about 400-500 BGN per ton. And if we assume that in a few years we have to move to the second generation of biofuels, the price will rise. Not to mention that at the moment there is no such production of second generation fuels, “Terziev recalled.
“Here the question arises who will pay this bill? If the European consumer’s income is 4-5 times higher than our income, then with us this transition will be a serious problem. I am not convinced that these quick measures of the EC will lead “And in a Brussels-style way, in 5-6 years we will say that these policies have created other problems,” he said.
According to the expert, the idea of a cross-border carbon tax is great, but in our country I wonder how exactly this will happen. If we raise the excise tax in our country, we will put in some modern renewable fuels and other new technologies. At the same time, 1,000 Turkish trucks with full tanks will come from the Republic of Turkey. As non-EU countries, they can do whatever they want. And what will happen? The black fuel market will develop. The situation is the same on the border between Romania and Moldova.
“Delivery of cans in buses will literally start here, because this will be the only way to survive,” Terziev commented.
–
