Serbian authorities are considering allowing the national electricity provider, EPS, to increase the price of electricity for households by 30% and the business sector by 70% in July or August of this year, Demostat has learned from sources close to the Serbian government.
The price of electricity in Serbia for households is adjusted by EPS, which then sends a request to the Serbian Energy Agency (AERS) and submits a cost estimate justifying the increase. Then, the AERS assesses whether EPS’ request is justified or not and, depending on that, approves the price increase or not. Because EPS is state-owned, the government has a decisive influence on the type of request EPS will submit to the Energy Agency.
If the authorities agree to the decision on the aforementioned price increase, that would be a major blow to the living standard and household budgets of people in Serbia. The last time electricity price for Serbian households went up was on February 1 last year, by 3.4%. The current price of electricity for households is 7.8 dinars per kilowatt-hour.
Although the Energy Agency had pointed out that even after that correction the price of electricity was still lower than the prices in the countries of the region and in Europe, experts had assessed that that would be an additional financial blow to already impoverished citizens and that the increased price of electricity due to the coronavirus outbreak was already a wrong and unjustified move.
“Considering that the 3.4% increase caused a negative reaction not only from individual consumers but also from companies, it is quite clear that the authorities agreeing to increase the electricity price by 30% would cause great dissatisfaction and anger in the public,” estimates Demostat.
If this happens, electricity bills for households will be 1,100 dinars higher than what they are today. Such a huge increase in prices would be especially difficult for those who use electricity to heat their homes and there are many of them in Serbia.
As for businesses, there is no doubt that their reaction to the 70% increase would be entirely negative. Late last year, due to the energy crisis, electricity prices on foreign exchanges soared, reaching astronomical figures, which is why the EPS decided to raise the price of electricity for companies in Serbia. This is justified by the fact that EPS, while being a producer of electricity, is at the same time forced to import it and pay high prices for it on foreign exchanges.
The Serbian government then intervened in the matter, adopting a decree which recommended that EPS conclude power supply contracts for buyers of electricity on the commercial market at a single price of 75 euros per megawatt-hour without value-added tax in the period from January 1 to June 30 of the current year.
Business owners have pointed out that even that price increase was completely unbearable and that they, therefore, had to increase the price of their products in order to survive in the market.
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