Serbia, A new electricity price increase is possible from September

, News Serbia Energy

For a few more days, until August 31, to be precise, the price of electricity for the economy will be limited to 75 euros per megawatt without VAT, and after that businessmen expect an increase – for which they are not ready.

Namely, for citizens, as it was announced earlier, from September 1, the price of electricity will increase by 6.5 percent, which is less than what was proposed by the Fiscal Council and what could be expected in the context of the crisis. At the same time, the price increase was announced for the economy.

Currently, the price is 75 euros per megawatt, and when that limit expires next Thursday, businessmen believe that the price will jump to 95 euros – which is almost double what they paid last year.

First, in November, the government froze electricity prices for the economy at 75 euros per megawatt-hour, excluding VAT, and then at the end of December, EPS extended that limit first until June 30 of this year, and then until the end of August.

At the moment, the EPS does not answer the question of when and how much the electricity price increase can be expected for the economy, when the limit will expire in what day.

Nebojša Atanacković from the Union of Employers of Serbia says that the price increase for the economy will directly increase the cost of the business entity and that they would like it not to be above the current or expected inflation, which is about 10 percent.

“If inflation is now around 12.8 percent, then let it be somewhere around that amount. We don’t need to look at how much electricity costs on the market in Europe, because it is a product that we should make an effort to produce in sufficient quantity here”, he points out.

Any new price increase, he notes, would not be good because it would push up inflation and that is why, as he says, it would be good if the price of electricity were below the inflation rate.

“We need to find other solutions, but if there will be a 6.5 percent increase for citizens or up to 10 percent with VAT, then it should not be different for the economy. There is no need for the economy to have significantly higher electricity prices compared to citizens”, says Atanacković.

Businessman, owner of Point Group Zoran Drakulić says that a price of 95 euros per megawatt-hour would be a “disaster”, because it would mean that the economy has increased electricity by 100 percent this year.

“It is incorrect, the citizens have an increase of eight percent, and we have 100 percent, but that will also affect the citizens. Especially some small companies will not be able to withstand it, the prices will have to rise again”, notes Drakulić.

The increase that the economy in Serbia, as he says, could withstand is the one we have now.

“I think that what they have increased so far is fine, that it is enough, we cannot pay all the debts incurred by Grcic”, points out Drakulić, talking about the former general director of EPS Milorad Grcic, and emphasizes how they last year they had a price of electricity of 48 euros, and then it was raised to 75, and if it reaches 95 euros per megawatt, that will not be right.

Economist Milojko Arsić tells Danas that what has been announced is not a big increase compared to the current costs of the economy.

“It’s something that happens all over the world, the costs of energy we pay, gas, electricity, it’s similar to the world. Especially since we import a significant amount of electricity. The question is whether the costs will be borne by companies as consumers who use that energy, or whether there will be losses in EPS, because electricity is sold below the price at which it is bought or produced”, says Arsić.

Someone, he says, will have to pay for it – either taxpayers or consumers.

“The second question is why the costs increased – in the case of gas, we could not avoid a price jump, in the case of electricity, if it were not for the poor management of EPS, we would have enough of our own electricity at a relatively low price. This is not the case now, because we will have to import 15 to 20 percent of consumption at a very high price, and part of the production will also be more expensive, that is the one that is financed from imported coal”, notes Arsić.

The professor of the Faculty of Economics in Belgrade says that the increase in the costs of the economy will certainly try to pass on to consumers, that some will succeed and some will not.

“Some will have a harder time succeeding, and everything depends on the demand for their products. Some will raise prices to cover costs, others will sell smaller quantities as demand falls. In any case, it will affect the increase in inflation, it will also be one of the reasons why inflation will be longer-lasting”, points out Milojko Arsić, Danas writes.