Entering the upcoming winter closely resembles the winter of 2022/2023, when the war in Ukraine drove oil and gas prices to record highs. This led to price hikes for these energy sources across Europe, including Serbia, subsequently triggering spiralling prices.
At that time, European energy experts estimated that the energy shock could have been significantly worse. However, European countries navigated that winter very successfully thanks to mild and warm weather, which did not require heavy energy consumption. Once again, we are heading into winter under pressure from high oil, gas, and electricity prices – driven both by wars in Iran and Ukraine, and by a severe drought that has struck Europe. This raises the question: could climate change save us from high costs once again?
Specifically, the price of Brent crude oil surpassed $100 per barrel again on Wednesday due to renewed tensions in the Middle East.
In Serbia, the price of diesel has hit an all-time high, exceeding the levels of 2022 and 2023 to reach 234 dinars, whilst petrol costs 205 dinars per litre. It is assumed that the rise in global oil market prices will filter through to fuel prices in Serbia this Friday, with a new increase expected.
Fuel prices in Serbia are also being weighed down by low water levels on the Danube, which have restricted the transport of petroleum products and shifted it to rail and road transport – both of which are more expensive and lack sufficient capacity for market needs.
The Minister of Mining and Energy, Dubravka Đedović Handanović, reassures citizens that Serbia has sufficient reserves of petroleum products, which she states have doubled over the past four years, though she warns that high prices remain a problem.
It is not only oil and fuel prices rising due to the wars in Ukraine and Iran; gas prices on the exchanges are surging as well.
On the Dutch TTF exchange, the price of natural gas reached €80 per megawatt-hour, or nearly $1,000 per 1,000 cubic metres. Gas prices were last at this level in late 2022 and early 2023.
Rising oil and gas prices on global exchanges are bad news ahead of the new heating season, which begins on 15 October.Europe is under particular pressure because, unlike in 2022/2023 when gas storage facilities were over 90 per cent full ahead of winter, current storage levels stand at around 67 per cent.
Serbia is not immune to these circumstances either, although government officials reassure that the gas storage facility in Banatski Dvor and the one Serbia rented in Hungary have been filled for the upcoming season. However, those reserves are sufficient for two to three months at most, which would not cover the entire season in the event of a cold winter. All hopes are now being pinned either on a new gas supply contract with Russia or on an extension of the current contract, which has already been extended several times and expires at the end of September.
Under that agreement, Serbia procures 2.2 billion cubic metres of gas annually (Serbia consumes just over three billion cubic metres per year), with the price determined by an oil-indexed formula.
President Aleksandar Vučić stated on 3 September that Serbia pays Russia around $400 per 1,000 cubic metres. However, that price rises as oil prices rise, so even if the contract remains in place, Russian gas for Serbia is expected to become more expensive – though it remains more than twice as cheap as gas on the open market.
High oil and gas prices will put pressure on Srbijagas and the Serbian national budget. Consequently, it would come as no surprise if gas prices for households and businesses rise this winter, a prospect also pointed out by sources speaking to Danas.
It is currently known that Serbia has promised the IMF that electricity prices for citizens will rise this winter, though no official announcement has yet been made.
Meanwhile, Serbia is also facing electricity supply issues. Due to low water levels on the Danube, Serbia’s largest hydroelectric plant, Đerdap, is operating at a fraction of its capacity, as is the thermal power plant in Kostolac due to insufficient cooling water.
“Citizens have nothing good to look forward to, energy price hikes are yet to come”
Economic consultant Bogdan Petrović assesses that Serbian citizens have nothing good to expect regarding energy prices this winter. As he notes, Serbia has so far enjoyed the privilege of barely feeling the sharp surge in gas prices on European exchanges, as most of the gas it consumes is imported from Russia under an oil-indexed formula tied to crude market movements.
“It is good for Serbia that it currently doesn’t have to suffer shocks due to rising gas prices on the exchanges. However, this winter we are reaching a point where the spike in oil prices will also push up the price of Russian gas for Serbia,” says Petrović.
He expects Russian gas for Serbia could be around 60 per cent more expensive for a period compared to a year ago, likely in the first quarter of next year rather than the fourth quarter of this year. This is particularly problematic, he stresses, because it coincides with peak gas consumption. Notably, Petrović points out, between 70 and 80 per cent of gas in Serbia is used for heating rather than industrial operations.
Regarding electricity, Petrović assesses that Serbia is entering the heating season in a very precarious position. “We are entering the heating season after a severe drought. There are no signs of heavy rainfall over the next two weeks, which adversely affects the operation of hydroelectric power plants,” he says.
At the same time, he expects a drastic increase in electricity prices across Europe due to reduced output from solar power plants, which were dominant during the summer.
“Solar energy production, which dominated in Europe over the summer, will no longer feature to the same extent, leading to a growing share of natural gas in European electricity generation,” Petrović explains. In his estimation, this will also impact EPS (Electric Power Industry of Serbia), which will have to import more electricity at higher prices than during the summer months.
(Danas, 11.09.2026)
https://www.danas.rs/vesti/ekonomija/poskupljenje-struje-i-gasa-zima/