Serbia: Gas trading & supply business to boost with new energy law

6. January 2015. / News Serbia Energy

As of 1st January 2015, in addition to choosing a new electricity supplier, households can also choose from whom they will be buying natural gas. Members of the Serbian Parliament adopted the Energy Law, which envisages easier investor investments in the energy sector, provides higher buyer protection and all this in accordance with the EU rules.

The new law introduces a full implementation of the Third Energy Package of the European Union within the sphere of gas, by which Serbia becomes the first country in the region which has applied these provisions. Тhis practically means that, as from 1st January 2015, in addition to choosing a new electricity supplier, households and small consumers will also have the right to choose from whom they will be buying gas, too.

Ljubo Maćić, the head of the Energy Agency of the Republic of Serbia, explains that the right to public gas supply belongs to households and small buyers as of 1st January 2015, whereat the small buyers are the legal entities and entrepreneurs whose facilities are connected to the distribution system and possess less than 50 employees and the income smaller than 10 million euros.

Households and small buyers may also remain on the public supply and be supplied in accordance with the existing contracts, but they also have both the right and the possibility (but not the obligation, too) to contract supply on the market with any natural gas supplier, Maćić explained.

At this moment, there are more than 260.000 natural gas consumers in Serbia, of which 250.000 are households and small consumers. As of 1st January 2015, a consumer who is emerging on the free market and who has not found a supplier, nor has he contracted supply, is entitled to be supplied by а last resort supplier for a period of maximum 60 days.

And this only provided that he addresses the request for the last resort supply to the “Serbiagas”, who has been previously appointed as the last reserve supplier by the Government, the same as the price of the last resort supply.

After receiving the request for the last resort supply, the last resort supplier is obliged to submit to the end buyer a contract on the last resort supply within three days after the date of starting the supply. If the end buyer has not concluded a contract with a supplier on the free market even after 60 days of the last resort supply, the right to the last resort supply ceases, because of which this buyer is threatened by a gas supply cutoff.

There are 38 licensed public suppliers and 33 distributors of gas in Serbia. They all purchase gas from the “Serbiagas”. When asked whether the gas price will be determined by the EARS in the future, too, Mićić says that this remains unchanged and explains that the price of one cubic meter of gas is changed only when there is a change in the import price and the quantities of domestic gas, with the adjustment with the exchange rate of dollar, too.

By the Energy Law which was adopted yesterday, it is also envisaged that the most socially vulnerable should have free cubic meters of gas in the following year, too. By the Regulation on protected energy buyers, it was envisaged that the gas bills for January, February, March, October, November and December should be reduced by 40 tо 75 cubic meters, also depending on the number of members of the socially vulnerable household.

Although the new rules of the game establish a full liberalization of the gas market and offer a choice, none of the licensed are expected to have a more favourable gas price than the “Serbiagas”, exactly as it is also the case with the EPS which will retain almost 97 percent of consumers despite the fact that, as from 1st January, the households will be able to choose somebody else to be their electricity supplier.

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