Domino effect of electricity price hike

From January 1, electricity will become more expensive for both individual and business consumption.

Although it has not been specified how much the price will go up, the Minister of Energy Dubravka Đedović said that the electricity bills for the average household will be increased by about 300 dinars (which is close to 8%).

Despite state officials claiming that this price increase is not significant and that consumers in Serbia will continue to pay for electricity cheaper than most of their European counterparts, this will be the second price increase in four months. That’s not all, because of the increase in electricity prices, the prices of everything – from bread to toilet paper – will jump too.

The new electricity price will come into force on January 1, 2023.

As economists have pointed out on several occasions, the increase in the price of electricity for the business sector will have the greatest impact on those products whose production requires substantial electricity consumption and the list of such products is quite long.

“As a rule, any increase in the price of electricity spills over to the prices of other products, and this certainly means that ordinary people will be in a more difficult position as this will further lower their living standard”, a Faculty of Economics professor, Dr. Dejan Molnar, says.

He points out that all kinds of industrial products will become more expensive.

This happens because electricity is considered the so-called intermediary good, which means that its prices influence the prices of other products into which it is incorporated.

Therefore, it is quite certain that business owners will increase the prices of their products and services, in order to cover costs and achieve the desired profit.

Another Faculty of Economics professor, Dr. Dejan Petković says that the new electricity prices for businesses will result in higher prices of other energy products and raw materials.

(Nova, 21.11.2022)

This post is also available in: Italiano

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