Business associations in Bulgaria have warned of hundreds of millions of leva in losses and forced extensions to seasonal operational shutdowns because of the cutoff of Russian natural gas.

Bulgarian daily Dnevnik said on January 8 2009 that a growing number of Bulgarian businesses were piling up losses in the fallout from the dispute over gas prices and debts owed by Ukraine to Russia.

The situation was critical, although not fatal yet, but the next three or four days would be crucial, said Ivo Prokopiev, who chairs the Confederation of Employers and Industrialists in Bulgaria and co-publishes Dnevnik.

The Bulgarian economy will be severely hit unless gas deliveries are restored within a week, said Evgenii Ivanov, executive director of the Confederation of Employers and Industrialists in Bulgaria.

Bulgarian daily Novinar, quoting Ivanov, predicted mass bankruptcies of firms in Bulgaria. It quoted Ivanov as saying that Bulgarian companies' losses because of the suspension of gas supplies exceeded 500 million leva a day.

Dnevnik quoted Bulgarian Industrial Association deputy chairman Kamen Kolev as saying that the losses to business arose not so much from smaller output, already squeezed by the financial turmoil, as from technological problems and stopping of production.

In a sign that the crisis was spilling over in other sectors, local banks said some customers could default on loan payments as losses mounted, Dnevnik said.

Bulgarian news agency Focus, in a January 8 report, quoted Bulgarian Industrial Capital Association chairman Vassil Velev as saying that the customary shutdown around New Year could be extended by two weeks because of the shutdown of supplies of natural gas.

"The saving grace is that the crisis occurs now, not a month ago, because most companies are not working at full capacity and most of them have not yet started their work because of a lack of orders. This is to say that the companies could extend their Christmas and New Year's holiday by a week or two and they will complete their decreased January programmes later, with prolonged working time and week," Focus quoted Velev as saying.

On January 7, Bulgaria introduced restrictions on natural gas consumption.

Bulgarian National Radio reported that gas supplies to all consumers were suspended except for gas distribution companies and utilities that deliver heating to hospitals, kindergartens, schools, social institutions and households.

Limited gas supplies would be delivered to plants with non-stop production cycles that could not switch to alternative energy sources. A total of 75 schools were closed on January 7 after temperatures in classrooms dropped significantly. The supply of heating in trams and trolleybuses in the capital Sofia was also suspended in a bid to limit the consumption of electricity and secure more power to households.

The gas shutdown has affected several large-scale operations, including troubled steel giant Kremikovtzi.

Other companies hit by the gas supply crisis include some in the chemical industry, breweries, bakeries, producers of ceramics, cement and other building materials.

In Gorna Oryahovitsa, the local bakery association said that production of bread in electric ovens had been doubled and in some cases tripled to try to ensure continued supply.

Novinar reported that Orgachim in Bulgaria's Danubian city of Rousse was still in operation but would not be able to continue for long, according to the plant's director Boiko Shoilekov.

In Montana, Bulgarian motor vehicle battery giant Monbat was reported to have stopped production.