Bulgaria strips sole oil refinery of key licences

27th July 2011, Comments 0 comments

Bulgaria's customs agency announced on Wednesday it had stripped the country's sole oil refinery, Russia-owned Lukoil Neftochim Burgas, of two key licences necessary for its operations.

The agency said in a statement that it had withdrawn the company's licences to operate two so-called tax warehouses, where excise goods such as oil and fuels can be produced or stocked before being subjected to a duty.

The decision, which entered into force late on Tuesday, was prompted by Neftochim's failure to instal important online connections between the fuel metres at the warehouses and the Bulgarian revenues agency by mid-June.

As a result, "the company no longer has the right to refine oil and sell fuel on the Bulgarian market," customs chief Vanyo Tanov told state BNT television.

Neftochim is Bulgaria's leading producer and supplier of fuel with a 40-percent market share and a capacity of 142,00 barrels per day, finance ministry data shows.

The company, which has one of the largest petrol station chains in Bulgaria with some 200 branches, makes up 9.0 percent of Bulgarian gross domestic product (GDP) and also exports fuel to neighbouring Serbia, Macedonia, Greece and Turkey.

However, Finance Minister Simeon Djankov assured journalists before meeting Lukoil officials in Sofia Wednesday: "There will not be a (fuel) shortage."

"We have to show that both the large and the small companies are equal before the law and have to abide by its requirements," he added to explain the licence decision.

To better monitor the payment of excise duties and taxes, the finance ministry obliged petrol station owners to link their meters to its revenue agency.

Tanov meanwhile told national radio the company could have its licences back "within the next two, three months" if it installed the links soon.

© 2011 AFP

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