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Turkeys voting for Christmas: Who votes for the end of oil derogation in Bulgaria?

In the multi-season series “Bulgarian politicians against the Lukoil oil refinery in Burgas,” an interesting plot twist has emerged. It turned out that the INSA Oil company, which is associated with the main opponent of the refinery, Bulgarian MP Delyan Peevski, is actively increasing the supply of petroleum products from Russia throughout 2023.

Under pressure

The oil refinery in the eastern Bulgarian resort of Burgas celebrated its 60th anniversary this year but appears to have received more media attention in the past year than in the past 59 years. Here is a brief overview of events. In February 2023, the EU embargo on the supply of oil and petroleum products from Russia finally came into force, but an exception was made for Bulgaria until the end of 2024. The country’s authorities then justified this decision by difficulties in finding alternative oil suppliers. A few months later, deputies of the GERB and DPS parties – Delyan Dobrev and Delyan Peevski – initiated an attack on the enterprise.

First, they have pushed through the cancellation of the long-term concession for the port of Rosenets, which the plant used, then they held in parliament the completion of the derogation period not in December, but in March 2024, with a mandatory phased reduction in the share of Russian oil in refining. Also the financial burden on the refinery was increased: in early November, Lukoil Neftohim Burgas announced on its website that it pays the highest taxes in Bulgaria – 50% of profits under a joint contribution and an additional 10% income tax.

It would seem that the deputies have achieved all their goals – the plant is giving away the entire margin from the difference between the prices of Brent and Urals and has already begun a phased transition to non-Russian oil, but the attack of the MPs did not stop there. Dobrev and Peevski introduced a bill to abolish derogation within 3 days for consideration by a parliamentary committee. Obviously, the populist step, especially before the start of winter, was not supported by Prime Minister Nikolai Denkov and was ultimately not approved by the relevant committee.

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“As Prime Minister, my first priority is the stability of the fuel market. If you cancel the derogation from the embargo in 3 days, risks are created,” Nikolai Denkov said after this decision.

Expecting the downfall

Delyan Peevski, a businessman with dubious reputation and soon-to-be leader of the DPS party, criticizes the Burgas plant more than all other Bulgarian politicians. DPS together with GERB form an expanded coalition with PP-DB parties. The PP-DB alliance leads the government, but does not have a majority in parliament, which forces them to cooperate with GERB and DPS, including on the issue of pressure on the Burgas refinery.

At the same time, GERB and DPS now occupy a very convenient position – they introduce increasingly scandalous bills that could undermine the energy and economic security of Bulgaria, and then criticize the government that rejects them.

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“The political trap is that if we are responsible for Bulgarian citizens and meet the deadlines, which experts say is a theoretical minimum, we will be accused of protecting Russian interests. And if we are not responsible and vote with them, and prices at gas stations will rise, the government will be blamed for this,” said the chairman of the PP party, Kiril Petkov, about the tactics of GERB and DPS.

Personal interest

At the end of November, Peevski publicly announced his intention to become prime minister for the first time.

However, there may be more than just political ambitions behind Peevsky and Dobrev’s attack on Lukoil.

Peevsky has long been associated with INSA Oil, one of the largest sellers of petroleum products on the Bulgarian market. For example, it was this company that paid the check of the famous lobbyist Tony Podesta, who sought to lift the US sanctions imposed in 2021 under the “Magnitsky Act” from Peevsky due to participation in corruption schemes.

As gratitude for his services, Peevski transferred to INSA Oil a long list of properties: the Berlin Hotel in Sofia, the diplomatic club and the field of the former Bulgartabak factory adjacent to the government residence – Insa Oil lawyers now nominally owned properties worth several hundred million leva.

It is interesting that in his public statements Peevsky always advocated banning the import of oil, but not petroleum products from Russia.

Statistics from the Kpler analytical center, which tracks commodity flows, give a logical explanation for this: in the first 11 months of 2023, INSA Oil purchased more than 200 thousand tons of diesel fuel from Russia.

This situation shows how Peevski’s rhetoric and actions can diverge from each other.

In the middle of scandals

All the years of Peevski’s stay in parliament were accompanied by corruption stories and investigations by the prosecutor’s office. He has been repeatedly accused of questionable financial schemes and influence on media freedom. His name is also associated with the looting of large industrial enterprises and the fourth largest bank in Bulgaria, KTB.

Peevski’s influence is especially evident in the media. “Any judge who encroaches on his interests must be prepared for a media attack,” notes Lozan Panov, a Bulgarian judge and chairman of the Supreme Court.

“My colleagues are afraid that if someone types their name into Google, they will come across an article about them in the Monitor newspaper,” adds MP Anton Kutev.

The oligarch’s websites also pay attention to the non-governmental organization Reporters Without Borders. It is hated for daring to rank Bulgaria worst in the EU in freedom of speech rankings. Peevski has been called “a symbol of corruption and collusion between the media, politicians and oligarchs.”

In recent months, Peevski, no longer hiding his interests, has been talking about the need to take the refinery away from Lukoil – and, taking into account his biography, it can hardly be assumed that he actually defends democratic values and solidarity with Ukraine, and uses it as an excuse to create a monopoly on the Bulgarian fuel market.

Against the backdrop of this excitement around the Lukoil refinery, Bulgaria is perceived in the EU as an arena for the battle of criminal groups. And while all his opponents are either in hiding or persecuted by justice, Peevski remains the only survivor.

And Bulgarian democracy, alas, may fall as the main victim of this battle.

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