“Messer Tehnogas” Serbia warns on business stagnation due to the price increase: experts says electricity price volatility yet expected

8. February 2013. / News Serbia Energy

Manufacturer and distributer of technical gases “Messer Tehnogas” announced possibility of risk to the company due to electricity price increase and possible work stoppage of “Željezare Smederevo”, he said in the statement published on Belgrade’s stock market where he is ranked at.

Actually Serbia is just lining up with other countries regarding price volatility which will be a standard element of power market on which the big consumers will have to procure their electricity.

-Electricity price increase was announced for consumers on high voltage, including “Messer Tehnogas”. If “Messer Tehnogas” doesn’t need to conclude contract for electricity supply at new offered price, that will immediately cause expenses increase and negative influence on company’s results in the following period- it is said in the statement.

Executive Director of Ernst Bode says that except announced drastic expenses increase, the uncertain situation refers to strategic partner tender for “Zeljezare Smederevo”, the biggest “Messer Tehnogas” buyer, and stoppage of production in this steel mill, what will have even worse effect on business results.

Big consumers and many production companies are used to the low electricity price in Serbia, and according to the state officials that was surely one of the reasons for their business expansion in Serbia, the products produced with cheap electricity price in Serbia were exported as well as the profit.

Increase of electricity price was announced and expected, liberalization of the market will bring new prices and linear increase of price in 2013 and 2014. This are new conditions on the market and the companies, big consumers will have to calculate this resources with bigger numbers. Price volatility is again a common factor in EU markets, where big consumers are obliged to procure their electricity on the market.

Source Serbi Energy Magazine

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