The Bulgarian government should lift the derogation in EU Regulation (EU) No 833/2014, which allows Bulgaria to continue importing Russian crude oil until the end of 2024. Continuing the Russian monopoly power on the Bulgarian fuels market is by far the most critical risk to Bulgaria’s economic security.

The Neftohim Burgas refinery, ultimately controlled by the Russian Lukoil, can operate efficiently without processing any Russian oil due to the ample availability of alternative crude oil grades within the Black Sea region, in addition to other sources in the Middle East and West Africa. 

This policy brief reviews possible scenarios for lifting the derogation. The worst-case scenario of a complete shutdown of the Neftohim refinery shows that any supply shock on the Bulgarian fuels market can be prevented with proper management of current reserves and the import infrastructure, which is now under Russian monopolistic control. The shutdown of the refinery can and must be avoided. The government should request a specific timeline and investment commitments from Lukoil for implementing the EU oil embargo, with full readiness at least 12 months before the current end date of the derogation, verified by an external audit from the Agency for State Financial Inspection. Non-compliance from Lukoil should trigger more robust measures such as putting Lukoil’s assets under state control.