Background
Bulgaria imports natural gas from Russia. It is used in combined heating plants in most Bulgarian cities, producing electricity during the summer months and heat during winter. In 2001 the Russian Gazprom signed an agreement with the then Bulgarian Energy Minister Rumen Ovcharov that Bulgaria will receive Russian gas at lower cost as a way to compensate for transit Russian pipes to other parts of Europe. Gas remained relatively cheap in Bulgaria until 2008 when Gazprom changed the terms of the contract. By then the price of gas had skyrocketed and Gazprom refused to sell cheap gas to Bulgaria. Meanwhile, a large embezzlement scandal raged in Sofia. The managing director of the central heating plant in Sofia Valentin Dimitrov was charged with fraud and stealing more than one million lev from the company. The trial is ongoing. A new board of directors was appointed. The citizens of Sofia were unable to pay the higher bills and some outright refused which in 2008 led to huge losses of the Toplofikacia company and it ran into debt with the Bulgarian energy provider Bulgargas. Less than 50% of Sofia residents paid their bills regularly. Bulgargas started reducing the amount of gas to the company saying payment was long overdue.
Read more about this topic: 2008 Bulgarian Energy Crisis
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