New electricity price on high voltage in Serbia, increase imminenent as well as the market liberalization says EPS deputy director

20. December 2012. / News Serbia Energy

Although  Energy Agency is authorized for electricity prices, not EPS directors, the price increase is considered as done deal. Electricity in Serbia can rise price for 20,25, maybe even 27%, announced Zivotije Jovanovic deputy director of EPS. He added that price won’t rise until the end of this, but in the beginning of the next year it is certain.

Jovanovic explained that reason for that is current kilowatt-hour price 5,1 cent, which is halfway cheaper than in surrounding countries. Slovenians pay 20 cent per kilowatt, Montenegro 8,80 and Macedonia 6,16 cent.

-I think that the price increase will occur during the heating season, but that all depends on the consent of the Serbian Government. There won’t be any drastic price increase and we should expect it to be 20 to 25 percent. EPS will probably ask for price increase between 26 and 27%- said Jovanovic.

EPS’s second man said that, but procedure is a bit different and it dictates that EPS should send the suggestion about electricity price increase to Energy Agency which, according to certain parameters, confirms demand adequacy. And after that Energy Agency gives approval for suggested correction. Energy Agency suggests that correction of kilowatt-hour should be higher or lower with en explanation, because EPS expenses justified that kind of calculation.

Demand from EPS has not yet been delivered to Energy Agency so they can not say whether Deputy General Manager’s predictions are justified or not. It is new that their demand will be announced just after it arrives, which was not the case earlier, says Agency.
Agency also says that they are the last address which decides about the future electricity price and that they don’t need government approval.

When you see electricity price per kilowatt-hour in Serbia, you will probably ask yourself how advisably it is for EPS directors to bid with price increase, knowing the fact that exists certain procedure which determines the price and the fact that’s the commodity which price influences all citizens, from bakery to public transport.

Citizens have to be introduced with price a month earlier according to the law and that is after the government agreement.
So, did Zivotije Jovanovic hurry when he said that there will be electricity price increase after New Year?
EPS didn’t have a comment to this question yesterday, but no one can forbid director to speak about thing people from EPS have talked about for a very long time.

Zorana Markovic, Minister of Energy, said the price of electricity will increase next year, but how much nobody can say. The main condition for that is changing of tariff system and introduction of social cards.

EU recommends that electricity should rise price three times for 10% next year, and until 2015, 60 to 89%.
Goran Nikolic, economist, collaborator of Institute for European Studies, says that electricity price increase is not economical, but political question, so economy can’t do anything about this question.

-Announced rise of price will be realistic just in case if social card is introduced earlier. Then will everybody would know how much one should pay for electricity. Otherwise, why should someone who is socially endangered pay the same price as someone who has possibility to pay economical price, says Nikolic.

-Beside that, one more reason why electricity is political, not economical question is that Serbian industry has privileged electricity price, because that is the only way to stimulate economy. The same is in some countries with low credits, which is not the case here-explains Nikolic.

Nikolic also says that electricity price increase will directly influence inflation increase for 1%, while indirect effects will be  much bigger.

-There is no commodity which is not influenced by price increase. But there is much abuse here, such as with fuel price increase, concludes Nikolic.

Source Serbia Energy Magazine

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