A 10% rise in oil prices would push consumer prices in Bulgaria up by 0.5% to 0.9%, according to an analysis by Lyubomir Datsov, a member of the Fiscal Council. He says a rise close to the upper end is more realistic.
The analysis looks at two cases. If only crude oil and gas get more expensive, prices rise by just over 0.5%. If refined oil products, meaning fuels, are added, the rise reaches almost 0.9%.
The model is linear, so the effect grows in step with the oil price. If oil rises by 30%, the impact triples and prices would go up by 1.6% to 2.7%.
Transport, chemicals, building materials and energy would be hit hardest. With oil 10% more expensive, non-metallic mineral products and chemicals would each cost 3.1% more. Datsov says natural gas is the main raw material and energy source in these sectors.
Land transport would cost 2.7% more, and water and air transport about 1.9% more. Fuel is the main cost in transport, so the two cases give very different results there, Datsov says. Electricity and heating would cost about 1.7% more.
Water supply and coal are directly affected by less than 0.3%, but their total rise is over 1.2%. The analysis says the reason is more expensive electricity and transport. In some sectors, the indirect effect is bigger than the direct one.
Food would cost 0.7% to 0.8% more, almost entirely through indirect effects.
Datsov used an "input-output" price model. The calculations are based on the National Statistical Institute's supply and use tables for 2018-2022.