Under the compensation programme for high electricity prices, Lukoil was granted €11.6 million from the Bulgarian state budget in 2024. The Russian-owned oil refinery Lukoil Neftochim near Burgas, the largest in the Balkans, reported a major loss of 213 million leva (€107 million) for 2025, meaning the company received more from the Bulgarian government than it paid in taxes.
The financial results were highlighted by Vladislav Panev, an economist and former MP from the liberal opposition coalition We Continue the Change – Democratic Bulgaria. Panev suggested this could be interpreted as indirect budgetary financing of Russia’s war in Ukraine.
“Lukoil Neftochim is once again paying no taxes, having posted a loss of 213 million leva for 2024. For yet another year, the Russian company takes more from the state than it gives back. In fact, it gives nothing. It is time for MPs to amend the electricity compensation scheme for non-household consumers so that the entire country does not end up unanimously sponsoring Putin’s war in Ukraine. That is exactly what is happening now, and it is scandalous,” Panev commented.
Meanwhile, Bulgaria’s only refinery continues to receive subsidies from Sofia. Under the compensation programme for high electricity prices for businesses, Lukoil Neftochim was granted 23 million leva (€11.6 million) from the Bulgarian state budget in 2024.
The refinery reported profits for the last three years in a row, when Bulgaria remained the only EU member state still processing Russian crude. Previously, the company had long been suspected of shifting profits to its Swiss-based trading arm Litasco, leaving its Bulgarian subsidiary to register losses and avoid tax liabilities.
Lukoil’s largest reported loss in Bulgaria came in 2020, when it recorded a shortfall of 509 million leva (€255 million). The company then suddenly moved into profit for three consecutive years, paying taxes, before sliding back into the red in 2024, coinciding with new EU restrictions on Russian crude.
In its official filing before Bulgarian authorities, the Russian company said sanctions linked to the war in Ukraine were the main driver behind the deterioration of its financial results. Lukoil Neftochim stated that it had completely stopped importing oil from Russia and had switched to “non-Russian, significantly more expensive grades of crude.”
At the same time, Brussels has signalled it may sanction Lukoil for operating a “shadow fleet” designed to bypass EU oil restrictions. Speculation has persisted for the past two years that Lukoil may sell its Bulgarian business. In June, the most influential MP supporting the ruling coalition, Delyan Peevski, called for the state to purchase the Burgas refinery, describing it as a strategic asset. The government has not taken up the proposal.
In August, Russia’s ambassador to Sofia, Eleonora Mitrofanova, said Lukoil subsidiaries in Bulgaria were frequently “subjected to pressure” from state authorities. She noted that in June the Commission on Protection of Competition (CPC) had launched yet another investigation into the company, adding: “It is no surprise that the Moscow headquarters is considering selling everything, though as far as we know no final decision has been taken.”
The CPC is currently examining Lukoil Neftochim Burgas and Lukoil Bulgaria for possible market abuse in the fuels sector over the past two years.
In a formal complaint to the regulator earlier this year argued there was strong evidence that consumers and businesses had been harmed by a deliberate restriction of fuel imports, allowing Lukoil to dominate the Bulgarian market with tacit consent from other players – a practice that drove up prices.
The Bulgarian antitrust authority has so far fined Lukoil more than 260 million leva (€130.1 million) for abuse of market dominance.