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Bulgaria’s government close to collapse amid tensions over Russian oil imports

Despite EU sanctions, Bulgaria is allowed to import Russian oil for the Lukoil Neftochim Burgas refinery until the refinery’s equipment is adjusted.
Despite EU sanctions, Bulgaria is allowed to import Russian oil for the Lukoil Neftochim Burgas refinery until the refinery’s equipment is adjusted.

Bulgaria’s government is on the verge of collapse as two of the three formations supporting it are threatening to pull out amid disagreements over the end of the derogation for Russian oil imports.

The country was allowed to import Russian oil for the Lukoil Neftochim Burgas refinery until the end of 2024 to get time to adjust the refinery’s equipment to use non-Russian oil.

Earlier this year, upon the request of the government, parliament decided to shorten that period until the beginning of October next year. That was backed by Gerb, Change Continues-Democratic Bulgaria (CC-DB) and the Movement for Rights and Freedoms (DPS).

However, subsequently Gerb and DPS started accusing the government of being pro-Russian and demanding an immediate end of the derogation. In response, the pro-Western government of Prime Minister Nikolai Denkov said that it would not be prudent ahead of the winter season and could lead to Bulgaria not having enough fuel for the heating season.

On November 16, Gerb and the DPS gave a clear signal they would not back the government during the vote of no-confidence filed by the opposition. The vote was scheduled for November 16 but Gerb and the DPS left the session and the vote failed. It was delayed until the next day.

The MPs from the two formations left the session hall after parliament rejected their proposal for an immediate end of the derogation in the first reading.

“I hope the colleagues [from CC-DB] read the signs this evening and do not destroy the Euro-Atlantic parliamentary majority, which would threaten the Euro-Atlantic government,” the Magnitsky-sanctioned leader of DPS’ parliamentary group Delyan Peevski said as quoted by Dnevnik news outlet.

“Either there will be a Euro-Atlantic parliamentary majority, or there will be a pro-Putin majority to rule Bulgaria. We shall not participate in it, nor will the colleagues from Gerb. This is the evening of signs,” Peevski said.

Over the past months, Peevski has become unusually active in parliament and is increasingly speaking on behalf of both the DPS and Gerb.

Denkov has called a session of the security council to discuss the end of the derogation and defined three stages to make this as soon as possible, but warned that any shortening of the terms is risky.

"Any shortening of the deadlines increases the risks of disruption of the operational activity of Lukoil Neftochim and increases the risk of an increase in the market price of fuels," Denkov said.

He added that the shortest possible deadlines are a reduction of the Russian oil import to up to 50% of all oil used by Lukoil Neftochim after end-December, then further reduction to 25% after end-January next year and a complete ban on Russian oil imports as of March 1 next year.

However, Denkov warned that this shortening of deadlines carries risks of blockages of equipment, explosions and fires. He also warned that this shortening could lead to an increase of fuel prices.

Peevski left the session of the council and said that the DPS will alert the national security agency and the prosecution that Lukoil Neftochim Burgas has not been paying taxes in the country and that 60% of the fuels produced by the refinery have been exported to countries other than Ukraine.

Earlier in November, a joint investigation by Global Witness, the Centre for Research on Energy and Clean Air (CREA) and the Center for the Study of Democracy (CSD) revealed that the Russian state has profited by an extra €1bn from the sale of oil to the Lukoil Neftochim Burgas refinery in Bulgaria, taking advantage of the exemption to the EU-wide ban on imports of Russian oil.

Peevski also accused CC-DB of working in coalition with far-right pro-Russian Vazrazhdane and with the Bulgarian Socialist Party (BSP).

“Until this moment [the security and customs services] do not have information about violation of sanctions by the Bulgarian institutions. If anyone is looking for political appearances, one way is to leave the meeting angry,” Denkov said.