* Price hike linked to oil-indexed contract with Gazprom
* Business says the increase serious hit to industries
By Angel Krasimirov
SOFIA, March 31 Bulgaria will raise wholesale
natural gas prices by 29.6 percent from April 1 to reflect
higher prices of alternative fuels on international markets, the
energy regulator said on Friday.
The sharp increase is an early test for the new government,
which is expected to be formed next month after an early
parliamentary election on Sunday.
Bulgaria gets almost all its natural gas supplies from
Russia's Gazprom under a oil-indexed contract.
Utility prices are a politically sensitive topic in the
European Union's poorest country because they make up a large
portion of monthly household expenses. High electricity bills
sparked nationwide street protests which toppled the government
of Prime Minister Boiko Borisov in 2013.
The April hike is expected to hurt gas-dependent Bulgarian
industries, weighing on their competitiveness, and translate
into higher bills for hot water and heating to households.
The State Commission for Energy and Water Regulation said in
a statement it had set gas prices at 382 levs ($208) per 1,000
cubic metres for the second quarter of 2017.
It said the new gas price was still lower than the price at
the beginning of last year when it was 405.6 levs per 1,000
cubic metres and was a direct consequence of the increase of
global oil prices and stronger U.S. dollar.
Bulgarian regulations require the gas wholeseller,
state-owned Bulgargaz, to set the gas price quarterly, based on
its contact with Gazprom with the energy regulator taking the
The new hot water and heating prices - expected increase
between 20 and 35 percent -- will be announced next week.
The double-digit hike in gas price prompted heavy criticism
from local employers and industrialists.
"The increase will seriously affect industry in Bulgaria,"
Bozhidar Danev, executive president of Bulgaria's largest
industrial association BIA, told Reuters, adding that chemical
and metallurgical companies will be most affected.
The higher prices will also influence bread prices, because
60 percent of the bakeries work on gas.
($1 = 1.8324 leva)
(Reporting by Angel Krasimirov; Editing by Ruth Pitchford)