In 2023, Bulgaria collected 217 million BGN (about 111 million euro) from a windfall tax on firms in the oil, natural gas, coal and petroleum products sectors, according to Finance Minister Lyudmila Petkova. This tax was introduced to capture the extraordinary profits these firms made due to the surge in energy prices following Russia’s invasion of Ukraine, according to Novinite.

The windfall tax, or “solidarity contribution,” was approved by the National Assembly in 2022, following an EU directive. It imposes an additional 33% tax on firms in these sectors whose profits in 2022 and 2023 exceed the average of the previous four years by more than 20%. Bulgaria raised this rate to 50% for the last quarter of 2023 to target the significant profits made by companies like Lukoil.

The Finance Ministry did not provide a breakdown of the contributions from different sectors, citing statistical confidentiality. However, it is expected that the bulk of the 217 million BGN came from Lukoil Neftochim and Lukoil Bulgaria. Despite initial expectations that Lukoil would contribute 600-700 million BGN, only 217 million BGN was collected, reflecting the challenges in implementing the tax.

In addition to the windfall tax, Lukoil also contributes to the “Energy System Security Fund,” created to capture the price difference between cheaper Russian oil and Brent crude. This fund was meant to support transportation costs for vulnerable groups. However, due to legal and administrative delays, only 113 million BGN was collected, far short of the projected 1 billion BGN.

Lukoil Neftochim’s contributions to the fund were only made for four months, from December 2023 to March 2024, before they ceased using Russian oil. Currently, the refinery is disputing the monthly contributions, delaying the start of the transportation support program.