Bulgaria will seek EU approval to halve value-added tax on electricity and gas to 10% in the first four months of 2022 to offset a surge in energy costs for businesses and households, officials said. Interim Prime Minister Stefan Yanev told lawmakers on Thursday his Cabinet has also asked the European Commission to allow state aid for power distribution companies, in a bid to cushion an expected hike in households" energy bills. While businesses in Bulgaria pay market prices for their electricity, prices for households are regulated. On Thursday, the average price on the Bulgarian energy bourse"s day-ahead platform, was 423 levs per MWh. The electricity prices for households are set at about 115 levs per megawatt hour (MWh) at present but will be increased from Jan. 1, the energy regulator has said. When setting prices, the regulator includes the expenses of the power distributors. The Balkan country has extended 450 million levs ($260.22 million) in state aid to over 630,000 companies to help them cope with soaring electricity prices for October and November. Yanev said it would be up to the new coalition government, expected to be formed next week, and the parliament to decide whether or not to enact the tax cut and to seek ways to extend state aid to businesses beyond November. ($1 = 1.7293 leva) Reporting by Tsvetelia Tsolova; Editing by Susan Fenton Our Standards: The Thomson Reuters Trust Principles.