Serbia, It is realistic to expect that the price of electricity and gas will rise during 2023

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The message of the representative of the International Monetary Fund (IMF) to Serbia that the special emphasis of the new arrangement is on the energy sector, does not mean only help to “Elektroprivreda Srbije” and “Srbijagas” (which the state financed through subsidies from the budget, but also indirectly through the provision of loan guarantees). , but also a new increase in the price of electricity and gas in the next two years. Those who have been reading IMF announcements for a long time know very well that the adjustment of energy tariffs and structural reforms to restore the financial balances of the state energy companies EPS and “Srbijagas” within two years is a euphemism for increasing the price of electricity and gas.

This is exactly what Željko Marković, M.Sc., head of the energy sector at the consulting firm “Diloit Serbia” and former director at “Elektroprivreda Srbije” confirms for “Politika”.

– There is room for an increase in the price of electricity for households. Although it has jumped twice this year, which brings us closer to a realistic price, there is still room to increase. It is still cheaper than what EPS needs to finance production costs. At the same time, we must not forget the money that was spent for additional imports at a high price during the previous months – says Marković.

Prices for the economy are set until December 31, after which a new calculation will be made to see if they should be increased or not. The current price of 95 euros per megawatt is approximately realistic.

He states that it is logical to expect that in due time the price of electricity will start to be regulated by the market. At this time, no one can predict when the new price increase could be (whether during or after the end of the heating season in 2023) and in what percentage, but if the recommendation of the IMF is respected, it is realistic that it will happen. By the way, the IMF has allocated 2.4 billion euros to Serbia with a new standby arrangement, part of which should be withdrawn by the end of this year and during the next year. The remaining part is scheduled for 2024.

It is difficult to say how long the state will be able to subsidize the price of electricity for households. Any such delay increases budget expenditure, and this directly affects public finances. The position of the IMF has been known for a long time – that social policy should not be conducted through public energy companies.

– Electricity or gas price increases are always unpopular measures in Serbia, but in a crisis like this it is a necessity. The standard of individual consumers will be damaged due to this pricing policy, but the state must find mechanisms to protect them. And these are energy-dangerous customers whose number is much higher than is currently thought – says Marković.

The budget foresees that the Ministry of Energy will be granted three times more money for the next year, about four billion dinars, which would be used for vulnerable households that have the right to part of free kilowatts, gas and heating. So far, around 68,000 citizens in Serbia have acquired the status of energy vulnerable customer. The new government decree provides that rural households can receive such a status regardless of the size of the apartment or house they live in, Politika writes.